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Czech Prime Minister Bohuslav Sobotka speaks to journalists at Prague Castle in Prague, Czech Republic May 4, 2017. REUTERS/David W Cerny

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PRAGUE (Reuters) - Czech Prime Minister Bohuslav Sobotka reversed his decision to resign on Friday, saying he would instead seek the removal of Finance Minister Andrej Babis, his main political rival, to end a dispute in the centre-left government.

Earlier this week Social Democrat leader Sobotka had said he would resign along with his whole government in an attempt to dislodge Babis, the billionaire head of coalition party ANO who has faced questions over his past business dealings.

Sobotka changed his mind after President Milos Zeman indicated he would treat the resignation as Sobotka's own, not the departure of the entire cabinet, a stance that would have left Babis in his post.

Sobotka said the president was interpreting the constitution as never before.

"In such a situation my resignation does not make any sense. The finance minister, burdened by extensive scandals, would remain in the government," Sobotka told reporters.

Sobotka said Babis had failed to clear suspicions that he avoided tax by buying tax-free bonds from his chemicals and food conglomerate.

Babis says he did not break any laws and has refused to resign. He told Reuters on Friday Sobotka's proposal to dismiss him violated the coalition agreement.

While a number of lawyers said the constitution implied the prime minister's resignation means the fall of the entire cabinet, some experts have said it also allowed the interpretation that such a resignation, without a cabinet vote, might mean only the departure of the prime minister.

Zeman's spokesman said the president would take time to make a decision on the proposed dismissal of Babis.

(Reporting by Robert Muller and Jan Lopatka; Writing by Jason Hovet; Editing by Robin Pomeroy)

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