He said after meeting with Prime Minister Vladimir Spidla that he had agreed to remain in office.

"It is legitimate to adopt a new budget and to say in three months to the (Czech) people, to the military and to the (Atlantic) Alliance (NATO), what the country can do," Tvrkik told journalists.

"I repeat that the goals we set over the two last years cannot be met," he said.

Tvrdik had said Thursday that he would resign because proposed budget cuts put foward by Spidla meant that the armed forces' capacity in areas including artillery, anti-aircraft defence and missions abroad would be damaged.

Under the proposed budget cuts the share of Gross Domestic Productdevoted to defence spending is to fall from 2.20 per cent as originally planned to 2.05 per cent, with a saving of 1.2 billion euros over five years.

The reform is aimed at phasing in a younger, more streamlined and more mobile professional force by 2006.

But Tvrdik, who took over the defence ministry in May 2001, had said Thursday that this was not practicable and complained that "the goalposts have been moved."

"It is unacceptable to ask the armed forces to forget what has been said, " he said. "In the future they need a stable budgetary framework which will make it possible to concentrate on a longterm vision."

Prague had promised NATO spending of 2.2 percent on defence at a summit last November and the figure had been repeated several times by then-president Vaclav Havel.

NATO Secretary-General George Robertson warned of the defence spending cut on a visit to Prague earlier in the week, Foreign Minister Cyril Svoboda said.

The cuts would mean that force numbers would fall to 38,000 rather than 45,000 as originally planned, and the number of bases from 69 to 57. Some arms modernisation programmes would be abandoned.

Tvrdik, 34, is a member of the premier's social democratic party (CSSD). A former career soldier, he was a member of the government of social democrat former prime minister Milos Zeman, and was confirmed in his function in July 2002 in Spidla's center-left government.

WAR.WIRE