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FILE PHOTO: Andrej Plenkovic, president of Croatian Democratic Union (HDZ), speaks during an election rally in Zagreb, Croatia September 8, 2016. REUTERS/Antonio Bronic

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ZAGREB (Reuters) - Croatian liberals turned down a coalition with the ruling conservative HDZ party on Tuesday, increasing the likelihood of snap polls in less than a year.

"After a long discussion on the (party) presidency, it was clear that the party would split," Ivan Vrdoljak, the head of the Croatian People's Party (HNS), told reporters. "I did not want to let it happen, so eventually I proposed that we do not enter the HDZ-led government which was accepted."

Vrdoljak, who held talks with Prime Minister Andrej Plenkovic, who also heads the HDZ, on a potential coalition, said he would resign as party leader.

"I had sincere intentions to drag Croatia out of (political)turmoil but splitting the party would be too high a price," Vrdoljak said.

Croatia is now a step closer to snap polls as all other key parliamentary parties also voiced unwillingness to join the HDZ-led government.

Plenkovic now seems to depend on a possible support of a few independent deputies together with representatives of national minorities, but it would likely make a rather thin and unstable majority.

The HDZ and its previous coalition partner, the centre-right Most ("Bridge") party, split in late April after Most supported the opposition in a no-confidence motion against Finance Minister Zdravko Maric, which he survived by one vote.

A second snap election after the one held last September, also after a split between the HDZ and the Most, would delay economic reforms needed to improve the investment environment and growth prospects in one of the European Union's weakest economies.

Plenkovic must propose four new ministers to parliament to replace those from Most. A vote on those appointments will be a clear test of whether he has secured enough parliamentary support unless he opts for early elections beforehand.

Plenkovic said on Tuesday his party favoured political stability but was ready to face snap polls.

In recent nationwide municipal polls the HDZ was the most successful party and according to a recent opinion poll it has support of 34 percent of voters ahead of the Social Democrats with 25 percent.

(Reporting by Igor Ilic; Editing by Bill Trott)

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