Citu, who has been prime minister since December, announced late on Wednesday that he had dismissed Justice Minister Stelian Ion, a member of the reformist USR-PLUS party.

At the heart of the row is a controversial 10 billion-euro ($12 billion) development plan for local communities pushed by Citu and his National Liberal Party (PNL), the senior party in the centre-right government.

Critics of the plan say the proposal lacks transparency and is being used by Citu to buy the support of powerful local politicians ahead of internal party elections this month.

The project needed Ion’s approval before it could proceed, which Ion refused to give.

“I won’t accept… ministers that are against the country’s modernisation,” Citu said at the end of a cabinet meeting Wednesday boycotted by USR-PLUS.

The prime minister called Ion’s behaviour “blackmail”.

For its part, the USR-PLUS party said Thursday the project amounted to theft of public funds, which it said it “has never condoned… and never will”.

It said in a statement it was demanding “negotiations to nominate a new prime minister”.

If Citu does not go, the reformist party is also willing to support a no-confidence vote against the current government.

It has already started exploring the possibility of such a motion with other parties, according to USR-PLUS leaders.

Citu is running against his predecessor as prime minister and current party president Ludovic Orban in party elections at the end of September.

Several NGOs warned that the controversial development plan resembles previous projects that were abused as vehicles for political patronage and led to funds being wasted.

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