Pakistan PM loses vital coalition partner as MQM quits
Pakistan's MQM party says it is leaving Prime Minister Yousuf Raza Gilani's coalition to join the opposition.
The move will deprive Mr Gilani of his majority in parliament.
He denied his government was in danger of collapsing. "I don't see any crisis," he said, speaking on television after the announcement.
But a BBC correspondent says Western allies engaged in the fight against the Taliban and al-Qaida had been hoping to avoid such political instability.
The government is now scrambling to find new partners, and without them, new elections are a possibility, analysts say.
The Muttahida Qaumi Movement, the second largest party in the coalition, withdrew two ministers from the federal cabinet last week.
Pakistan's governing coalition held 181 seats - including the MQM's 25 - in the 342-member parliament.
The MQM's departure leaves Mr Gilani's Pakistan People's Party (PPP) well below the 172 seats needed to preserve its majority.
A statement issued by the party said: "Right at the start of the new year the government has raised the prices of petrol and kerosene oil which is unbearable for the people who are already under pressure from the already high prices."
Correspondents say the move comes as a surprise.
"We have decided to sit on opposition benches because the government has not done anything to address the issues we have been protesting about," said Faisal Sabzwari, a MQM regional minister in Sindh province.
Muhammad Anwar, the MQM's co-ordinator, told the BBC said that the party wanted democracy to take root in Pakistan but that price hikes, bad governance and corruption had "passed all limits".
Even so, he said that by not pulling out of government in Sindh province, the MQM had given the government "a chance to take corrective measures".
The MQM dominates politics in the city of Karachi.
The city, which the capital of Sindh province, has seen ethnic tension, with the MQM's militant wing widely believed to be behind most ethnic and political killings in the city over the last few years.
A smaller coalition partner, the Jamiat-i-Ulema Islam party, withdrew from the government earlier in December after one of its ministers was sacked.
Many in Pakistan believe the two parties are acting at the behest of the security establishment to undermine the country's political system.