Bulgaria's outgoing PM rejects Russian ultimatum, unveils potential successor

SOFIA (Reuters) -Bulgaria's outgoing Prime Minister Kiril Petkov rejected a Russian ultimatum to reverse a decision to expel 70 Russian diplomatic staff by noon on Friday and named the country's finance minister as his possible successor.

The Balkan nation, an EU and NATO member state and once a close ally of Russia, has been roiled in recent days by political upheaval which saw parliament pass a vote of no-confidence in the coalition government last week and Petkov this week announce the Russian expulsions on espionage concerns.

Russia responded by issuing an ultimatum on Thursday which included a threat to close Russia's embassy unless Sofia reversed the expulsions, a move condemned by the EU on Friday as unjustified.

Petkov said in a video statement that Russia's behaviour was unacceptable.

"We will not allow Bulgaria to take a wrong turn... We will not allow foreign diplomats to give ultimatums to the Bulgarian state (to comply with their demands) by noon," he said.

Announcing that his centrist PP party would nominate Finance Minister Assen Vassilev to become the country's next prime minister, he also called on all his coalition partners to back his party's quest to uproot widespread corruption and to work to boost incomes.

The diplomatic dispute with Russia has fractured the government after one coalition ally, the Socialists, said they would not back a new government led by Petkov.

The Socialists, who have traditionally been more friendly towards Moscow, said they were angered by Petkov's decision to expel the Russians.

Earlier on Friday, they called on parliament to vote to revoke the expulsions to save diplomatic ties with Moscow. The biggest opposition party, the centre-right GERB, said it backed the expulsions.

Petkov hopes his party can stay in office and avoid new elections by putting forward someone other than himself to be prime minister. Following Vassilev's nomination, the Socialists said they were ready to hold negotiations.

President Rumen Radev will later on Friday hand a mandate to the PP to form a new government. The party, which will have seven days to come up with detailed proposals, said it would only propose a new cabinet if it musters an absolute majority in parliament.

(Reporting by Tsvetelia Tsolova; Editing by Andrew Osborn)