BUDAPEST • Hungary’s Fidesz opposition yesterday called off its planned anti-government rally at the weekend, which the government had warned would cause week-long violent protests to escalate.

The move boosted embattled Socialist Prime Minister Ferenc Gyurcsany’s hopes of riding out a storm that has paralysed the Hungarian capital this week, undermined the country’s credit rating and weakened the forint currency.

But protesters, gathering again at the parliament square for a fourth night to demand Gyurcsany step down, said they would continue rallying, with our without Fidesz. A far-right party will march on Saturday to the site of the cancelled Fidesz rally.

“People in the countryside are totally disappointed that the demonstration was put off ... they organised everything assuming they would come to the rally. I have a suspicion they will turn up anyway,” said Terez Rostas, 48, one of a few hundred people camped outside parliament.

Thousands of protesters, including rioting youths, have taken to the streets of the capital in the evenings in anger at Gyurcsany’s leaked admission that he lied about the perilous state of the economy to win re-election in April.

The riots, closely watched in neighbouring central European nations who are also experiencing political turmoil, have brought a lesson to leaders in the region that morality in politics can be as important as economic issues.

Hundreds of people and police were injured in three days of clashes as rioters burned cars and smashed shop windows in Budapest, marking the worst violence in the former communist country since its failed 1956 uprising against Soviet rule.

On Wednesday night, protests were largely peaceful, although 16 people were taken to hospital with injuries.

“In the interests of peaceful and well-meaning citizens, Fidesz has decided to postpone the event,” senior Fidesz official Laszlo Kover told a news conference.

Prominent political philosopher Gaspar Miklos Tamas said Fidesz leader and former Prime Minister Viktor Orban had clearly opted not to risk stirring violence, but the move might not pay dividends among his electorate in the longer run.

“He has resigned as the leader of the united right because of cancelling this mass rally,” he said.

Although the cancellation eased worries about rising violence, political confrontation remained intense. Fidesz refused to attend talks with the government yesterday on how to deal with the protests.

“What is happening on the streets ... of Budapest today and the continuation of the violence is only in the interest of the government,” Kover said. Police had earlier chased a group of some 80 skinhead demonstrators as the anti-Gyurcsany rally broke up at Kossuth square.

The massive security presence, with riot police moving in large groups often followed by rows of police cars with their blue lights flashing, had isolated the skinheads and police made arrests, with the action being transmitted live on HIR TV.

Observers said police had apparently learned from the previous days’ unrest and were highly organised, allowing the sizeable press contingent to move freely and take photographs.

Gyurcsany has rejected calls from Fidesz to step down and has vowed to continue with unpopular measures needed after years of Socialist budget largesse to put the new European Union member back on track to adopt the euro.

Gyurcsany was taped in May telling his Socialist Party they “did nothing for four years” and lied “day and night” to win the April election.

Meanwhile, the White House yesterday scolded Hungarian Prime Minister Ferenc Gyurcsany, who has admitted lying to win reelection earlier this year, saying that was “never appropriate” behavior. “Obviously, it’s never appropriate to lie to people, in a democracy or otherwise,” spokeswoman Dana Perino told reporters travelling with US President George W Bush to Florida for political fund-raisers.

Hungary has been shaken by riots since public radio on Sunday broadcast a May recording of Gyurcsany telling deputies from his socialist party that he had lied to the country about the dire state of the economy in order to win reelection in April.

“This is a matter that the people of Hungary are going to have to address through the democratic processes that they have in place. And so far, from what I’ve seen, I think that they are doing that and people are expressing their reaction to it, so far, in a non-violent way,” said Perino.

“We certainly hope that that continues. But I think this is a matter for the people of Hungary to deal with,” she said.

Bush has met at least twice with Gyurcsany, once at the White House in October 2005, when he told the prime minister he was impressed by Hungary’s “economic progress,” and then in Hungary in June, when he celebrated Hungary’s 1956 uprising against Soviet domination.

Despite promising tax cuts and higher social spending during the election campaign, Gyurcsany has introduced harsh economic reforms that include tax increases and which have left his party slumping in polls.

The austerity package is designed to rein in Hungary’s massive public deficit, which at more than 10 percent is the highest in the European Union, and help the former Soviet bloc state join the euro.