PRAGUE, Czech Republic -- Czech Prime Minister Stanislav Gross said Saturday he would resign and make way for a new coalition government because of a scandal surrounding the financing of his luxury apartment.

Gross did not specify a date for his resignation, but he said the Czech ambassador to the European Union, Jan Kohout, was his Social Democrat party's candidate to replace him.

The scandal arose over questions of how Gross paid for a luxury apartment. He first said he paid for it with his own money and a mortgage, but then he said he borrowed money from his uncle.

It was later reported that his uncle borrowed the cash from a journalist.

Gross, who has denied wrongdoing but apologized for how he handled the crisis, has been struggling to hold his government together amid calls for him to step down. He survived a no-confidence vote last week.

Five ministers have resigned from his Cabinet in the last week, while the two coalition partner parties demanded Gross either leave his post or call early elections to restore confidence in the government.

On March 31, the Christian Democrats pulled out of the three-party coalition government over the scandal.

"This concept could be a way out of the current stalemate," Gross told reporters as he announced his resignation plans.

Talks with the Christian Democrats and the other coalition partner Freedom Union on forming a new government should start in next few days, Kohout said. Both parties agreed to negotiate.

Christian Democrat spokesman Ondrej Jakob said his party had not been officially informed about details of the proposal, but a meeting of the coalition parties was scheduled for Sunday.

Gross said he would not step down until an agreement is reached with the coalition parties and the plan, approved by the executive committee of his Social Democrats Saturday, received support from President Vaclav Klaus.

He also said that if the three parties fail to strike a deal, he would stay at the helm of a minority government, which would have to rely on support from the communists.

According to the Czech constitution, Klaus would need to accept any resignation and select a new prime minister. The president indicated he would support Gross' proposal after some details were revealed Thursday.

Kohout, meanwhile, said that if selected he would make it a priority for his government to seek approval for the European Union constitution. It is not yet clear whether the document will be ratified by the Czech parliament or put to a nationwide referendum.

EU leaders signed the draft constitution in October in Rome after more than two years of acrimonious debate between governments of the 25 member states. The European Parliament overwhelmingly approved it in January, but all EU member countries must ratify it before it comes into force.