VIENNA (Reuters) - Talks between Austria's two centrist coalition parties aimed at setting policy priorities and averting a government collapse are making progress, but they will probably last through the weekend and into next week, Chancellor Christian Kern said on Friday.
Kern, a Social Democrat, said on Tuesday he wanted an agreement by Friday on concrete policies for the remaining year and a half of the coalition's term. Failure to reach a deal by then, he suggested, might mean the end of the coalition and lead to a snap parliamentary election.
He has since retreated from those comments, saying there will be no snap election, but meetings that run into the small hours have continued as the two sides try to reach an agreement.
A snap election would most likely play into the hands of the far-right Freedom Party (FPO), which is running first in opinion polls, helped by widespread frustration with a coalition government that many voters believe is ineffective.
"I assume that we can get to a result in the course of next week, at the start of next week," Kern told reporters as talks broke up on Friday evening and were set to resume on Saturday.
"But that depends of course on the progress that is made on the critical points," he said, without specifying what those critical point were.
As the talks went on into Friday afternoon, Kern postponed a visit to Israel and the West Bank that was due to begin on Sunday because of the talks.
Kern, who took over as head of the government in May, has sought to project a more modern and dynamic image than his predecessor, Werner Faymann, who resigned after an FPO candidate won the first round of the presidential election.
At an event this month, Kern announced a 150-page list of proposals on issues ranging from cutting unemployment to reforming education.
Kern's junior coalition partners from the conservative People's Party have countered with their own proposals, many of them on security and immigration. They include halving a cap on asylum claims set at 35,000 for this year and banning public servants from wearing Muslim headscarves.
The government has given few details of the talks, and a spokeswoman for Kern said the situation was changing hourly. Austrian media have said other points being discussed include tax relief for employers and making working hours more flexible.
"We are on a constructive path, but of course the whole thing will only be decided when we really reach the finish," Vice Chancellor Reinhold Mitterlehner told reporters on Friday, adding that the talks were in the "final straight".
(Reporting by Francois Murphy; Editing by Larry King)