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Czech President Vaclav Klaus has appointed Petr Necas, leader of the centre-right Civic Democrat party, as the country's new prime minister.

Following elections last month, the right-wing TOP 09 and the centrist Public Affairs parties have been holding talks with the Civic Democrats.

But the talks have become snagged over who should get the crucial finance and interior ministries.

The Czech Republic has been in political limbo for more than a year.

The three parties expected to form a government say they aim to bring the budget deficit under 5% next year, from a projected 5.3% in 2010.

They also want to reform pensions and health care, and reduce corruption.

Together they hold 118 of 200 seats in the Czech parliament.

After his appointment on Monday, Mr Necas called for a "hard-working cabinet" that would quickly deal with the budget.

"This country needs a stable government, an efficient government, a government that will work on fundamental problems that threaten the country," he said.

Mr Necas, a 45-year-old former social affairs minister, inherits a difficult job, the ´óÏó´«Ã½'s Rob Cameron reports from Prague.

For the past year a caretaker cabinet has kept things ticking over, he says, but it has been unable to make inroads on pressing problems such as the swelling deficit.

Outgoing Prime Minister Jan Fischer took over in May 2009 after the Civic Democrat leader at the time, Mirek Topolanek, was ousted during the Czech Republic's EU presidency.