The new Czech government has lost a confidence vote in parliament, making it likely that early elections will be held before the end of the year.
Last month, President Milos Zeman appointed a close ally, Jiri Rusnok, as prime minister despite the opposition of the main political parties.
Mr Rusnok won over some MPs, but lost Wednesday's vote by 93 to 100.
His predecessor Petr Necas resigned in June after a senior aide was charged with bribery and abuse of power.
Two former MPs, an ex-minister and the current and former heads of military intelligence were also detained in the largest anti-corruption investigation in the country since the fall of communism.
'Very dignified loss'
Critics accused Mr Zeman of a power-grab when he made his economic adviser prime minister and swore in a technocratic "government of experts" on 10 July.
Centre-right parties, which had supported Mr Necas, argued that they had the right to form a government because they held a majority of 101 in the 200-seat lower house of parliament. They proposed the speaker, Miroslava Nemcova, for the premiership.
Mr Rusnok managed to win the support of left-leaning parties ahead of Wednesday's confidence motion, which had to be held within 30 days of the cabinet being sworn in, but still lost after a nine-hour debate.
Ahead of the vote, Mr Zeman said he would keep Mr Rusnok in place for several weeks even if he lost. The prime minister said he would resign afterwards, but would continue in a caretaker capacity until a new government was formed or elections were held.
"I see the result as a very dignified loss," he said.
Under the constitution, the president has a second chance to appoint a prime minister. He could also decline to name a replacement for Mr Rusnok before the next elections, scheduled for early 2014.
However, parliament has the power to dissolve itself, which would force early elections.
The right-wing TOP 09 party immediately called for dissolution after Wednesday's vote and Social Democrat chairman Bohuslav Sobotka said elections could take place in October.
"It doesn't make sense to wait," he told reporters.