Tim Gosling in Prague -

Poland's governing coalition is struggling to find consensus between the senior Civic Platform and its Polish Peasants' Party (PSL) partner over the fate of the country's struggling construction companies, with ministers stating contrasting positions on the matter on July 11.

With major builders PBG and Polimex-Mostostal in financial trouble, Economy Minister Waldemar Pawlak - who as head of PSL is also deputy prime minister - suggested after PBG applied for bankruptcy that the government could nationalise the pair or become their guarantor. He pushed that agenda again on July 11, telling the TVN CNBC broadcaster that state-owned development agency ARP could purchase new bond issues from the companies. He added that PBG would require around PLN500m (€120m) to regain liquidity, according to Reuters.

However, before Poland could test potential support for the builders against EU competition legislation, the economy ministry would also need the approval of the treasury ministry and the finance ministry, neither of which PSL controls, whilst ARP has hinted it may be less than enthusiastic on the plan.

Finance Minster Jacek Rostowski - well respected by the markets, though likely less well-known by PSL's constituency amongst pensioners and blue-collar workers in the provinces - stated his staunch opposition to offering the construction sector state aid on July 11. Rostowski told reporters: "We have a free-market economy, in which companies fare well. This is how we've been building our national wealth over the past 20 years."

However, the same day, Treasury Minister Mikolaj Budzanowski offered the idea some momentum, saying the government is considering its options, and could offer either direct state support to PBG, or simply channel cash through acquisitions - a move he suggested would be quicker and could circumvent worries that Brussels could try to block the bailout. "We will either decide to grant state support worth PLN385m, which requires the approval of the European Commission and that will take a few months. The other option is that ARP takes over some subsidiaries of PBG."

Whilst the centre-right Civic Platform is unlikely to jump on the nationalisation bandwagon with any great enthusiasm, it's hand may be forced by concern over the potential impact of a disorderly bankruptcy. PBG reportedly owes as much as PLN1bn to the country's banks, and the National Bank of Poland already issued a warning earlier this week that bad loan provisions could help cut banking sector profitability by up to 30% by 2014.