Having examined facts in the matter, Cerar assessed Veber can no longer stay in office, the PM announced at a news conference on Monday following a meeting of coalition partners.

Coming out of the same meeting, Veber said he would not resign but would instead defend his "lawful actions" before parliament, which the prime minister is to ask to dismiss Veber.

Veber's job has been on the line since it transpired earlier this month that he ordered the military intelligence to produce a report on security consequences of Telekom's planned sale to a foreign owner.

The PM told reporters the reason his trust in the minister had been shaken was inconsistencies in his explanations over why he ordered the intelligence report and legal issues raised in the matter.

"His intention may have been legitimate, but he has unfortunately chosen an opaque way to do so," Cerar said, adding that a legitimate way would be for Veber to raise the issue on the National Security Council and bodies in charge.

If the minister thought the military Intelligence and Security Service (OVS) should be engaged, he should have notified the PM or the government, he said.

He also said that the minister's communication with OVS chief should be traceable, but he agreed the government must deal with security aspects of Telekom's privatisation.

The situation could trigger a coalition crisis as some officials from the Social Democrats (SD), who stand firmly behind their minister, indicated last week the party might quit.

Cerar admitted there was some tension in the coalition over the issue. He also said that he had proposed to the SD to consider putting forward a replacement for Veber.

The PM underscored that the government continued its work as usual and was continuing the privatisation process. He said he kept Telekom's privatisation apart from the issue dealt with today.

The SD president and his closest aides are meeting later today to debate the issue, with the party leadership meeting later in the week, SD leader Dejan Židan told the press after the coalition meeting.

Židan would not say whether he would propose for the party to quit the coalition. "We'll adopt a collective opinion. Even if we are the smallest coalition party, we expect same criteria to apply."

But Židan repeated the SD was convinced Veber's actions had been lawful and that he did what he had to do, and that OVS did not interfere in the civilian sphere.

Veber rejected the claim by Matej Tonin, the head of the Security Intelligence Commission, which found out about the Telekom report, that he abused his powers to oversee privatisation, which Veber's party opposes.

"This is not true, we acted within the scope of or powers. The OVS as a body within the Defence Ministry merely checked what a change in the operator's ownership would entail for their organisation."

However, the leader of the fellow coalition Pensioners' Party (DeSUS), Karl Erjavec, said he must believe Cerar in saying Veber can no longer do his job, as he was the one who looked into the matter.

DeSUS too will discuss the situation at a meeting of the deputy group later today and a session of the party leadership on Wednesday.

Cerar's decision was welcomed by the opposition New Slovenia (NSi) and Democratic Party (SDS), who said they would not file a motion to oust Veber, considering the PM's decision.

If Veber indeed loses his job, the 54-year old seasoned politician is to return to parliamentary benches, which means stand-in MP Franci Križanič will lose his job.

Re-elected MP in the July 2014 snap poll, Veber was appointed minister in September last year after spending 16 years as MP for the SocDems, including a half-a-year stint as speaker in the previous term.

Like his party, an opponent of privatisation, Veber was the only coalition MP in July 2013 to vote against the government's plan to sell state stakes in 15 companies, including Telekom.

Veber also served four terms as mayor of Kočevje in 1994-2010, during which time he sparked controversy for calling a community meeting in 2006 to resist the resettlement of a Roma family to Kočevje.

If dismissed, Veber will be the fourth minister leaving the Miro Cerar government only six months into its term.

While Minister for Development, Strategic Projects and Cohesion Violeta Bulc resigned for taking over as European transport commissioner, the other two stepped down over allegations of wrongdoing.

Economy Minister Jožef Petrovič came under fire after the competition watchdog found the company where he used to be a director had colluded to fix the prices of office supplies sold to the government.

Education Minister Stanka Setnikar Cankar was swept out of office for having earned EUR 600,000 with freelance contracts working for the same faculty where she was employed.