Allawi's Iraqi National List is the only major political party in Iraq to include high ranking members from both the Sunni and Shia community. It has five ministers and 25 members of parliament.

If Allawi's supporters were to quit Prime Minister Nuri al-Maliki's coalition, it would strike a blow to attempts to portray the government as a moderate, non-sectarian force in an Iraqi increasingly divided by violence and extremism.

The List says Maliki's Shia-led government has failed to honour promises to allow more Sunnis into public service and of persecuting its enemies under the guise of fighting corruption and terrorism.

"We strongly fear that the government's announced security plan will suffer setbacks because of disagreements and clashes between senior officials," the List said, in a statement sent to reporters.

"In this context, the Iraqi List feels it will soon no longer be able to accept the responsibility of being in this government, because of its sectarian domination and narrow-mindedness," it warned.

"We wouldn't have joined government in the first place but for pressure on us to serve the national interest, but in the last few months the government has done the opposite, and committed despicable acts against many citizens."

The coalition that was formed in June last year, after Iraq's first election since the fall of Saddam Hussein, is a fractious collection of often feuding parties, many of them with links to militias engaged in sectarian violence.

Allawi was appointed as Iraq's interim premier in June 2004 when the US occupying authorities returned Iraq's sovereignty, but his secular party lost out to Shia Islamists in the later elections.

The party did not set a deadline for its withdrawal, but party spokesman Ibrahim al-Janabi told AFP that the day would soon be at hand.

"This is a final ultimatum to withdraw from the government. The decision has not been taken yet but it will be in the short run rather than the long run.

Meanwhile, a US Army helicopter made a "hard landing" in northern Iraq yesterday, but the military said the problem was mechanical and not the result of hostile fire.

Two pilots were injured and evacuated to an American military hospital in Kirkuk, about 180 miles north of Baghdad, the military said in a statement. There was no word on the extent of the pilots' injuries.