The imminent resignation of the Czech prime minister and cabinet, due later Monday, creates instability that may force 70% state-owned power company CEZ AS (BAACEZ.PR) to delay the final decision in its ongoing nuclear expansion tender, a spokesman for the company said Monday.

CEZ aims to choose a winner in September in its $10 billion tender to build two new nuclear reactors at its Temelin nuclear power station in the south of the Czech Republic . The company plans to then sign a contract with the winner by the end of this year so the new units are built and connected to the grid by 2025.

"The timeline for now isn't changing," Ladislav Kriz said.

"But on the other hand, it's difficult to imagine undertaking a final decision of the tender without the clear position of the majority owner, without a clearly-defined government with a clear cut mandate and an obvious point of view on state energy policy," Mr. Kriz said.

Amid bribery and power abuse scandals, Prime Minister Petr Necas will formally tender his resignation to President Milos Zeman Monday evening, triggering the process of replacing the entire fiscally-conservative coalition cabinet, in power since mid-2010, which will be falling with Mr. Necas.

An interim Czech government that simply pays the bills but lacks the mandate needed for strategic, political decisions is likely to rule until mid-2014 as the country's president favors regularly scheduled elections.

The bidders in the tender are Westinghouse Electricity Co, a unit of Japan 's Toshiba Corp. (6502.TO) and Russian state-owned Rosatom.

However, due to record-low wholesale prices for electricity of roughly 38 euros ($50.7) per megawatt hour, the planned nuclear expansion--which has been in the works for more than five years--may not be economically viable.

Outgoing Finance Minister Miroslav Kalousek in May called for a new economic feasibility report to determine if construction of new reactors makes sense.

That report is due to be concluded by the end of this month.

CEZ officials earlier said the terms of the tender and future contract stipulate that they have four years to back out of the deal for any reason.

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