East Timor's ruling coalition government has lost its majority - with a key partner switching sides to join the opposition.

The ASDT party was a key force in helping Xanana Gusmao's AMP coalition win the numbers to form government at last year's elections.

But the party has now signed an agreement to side with the opposition Fretilin party - citing corruption and nepotism within the government.

Fretilin spokesman Jose Teixeira says the party is not planning to challenge for power - but hopes to force the government to an early election next year.

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