Guido Goulart, Dili – Prime Minster Xanana Gusmao said Friday that the resignation of his deputy, whose party has threatened to withdraw from the ruling coalition, will not lead to the collapse of East Timor's government.

Gusmao's former deputy Mario Viejas Carrascalao said he had no choice but to quit this week after his boss called him a "liar" for openly questioning the country's commitment to fighting corruption and improving people's lives.

If Carrascalao's Social Democratic Party pull outs of the government, Gusmao's ruling coalition will lose its majority in Parliament by three seats, dealing another blow to the tiny country's political stability.

"This won't affect my government at all," Gusmao told The Associated Press early Friday morning. "The government is still strong."

It was unclear wether Gusmao was saying that he expected remaining Social Democrats Party to stay, or whether he was confident that other lawmakers could be recruited to join his coalition if they withdraw.

East Timor, which broke from 24 years of Indonesian occupation in 1999 and was then briefly administered by the United Nations, has faced political turmoil and violence since declaring independence in 2002.

The half-island nation in the Pacific, with a population of 1 million, is still one of the poorest in the region, even though it has benefited from large offshore oil and gas resources.

Gusmao said he has accepted Carrascalao's resignation as one of two deputy prime ministers and will not seek a replacement.

Members of the Social Democratic Party, among four parties in the ruling coalition, hinted Friday that they could withdraw from the government as early as next week.

Damien Kingsbury, an Australia expert on East Timor, has said that if that happens the prime may have to push up a 2012 election date by a year.