It also demanded thatgeneral election be called no later than in May

The central bank forecast in December the economy would grow2 percent this year, but an increasing number of private-sectorexperts forecast South Korea's economy would contract by as muchas 3 percent as the global recession deepens (Editing by Jonathan Thatcher) Currencies Bonds. (Adds Social Democrat resolution, comments) By Omar R Valdimarsson REYKJAVIK, Jan 21 (Reuters) - Angry Icelandic protestersclashed with riot police as they called for a new government onWednesday and the country's prime minister said he had thesupport of his coalition partner. Iceland Prime Minister Geir Haarde, speaking after hislimousine had been pelted with eggs and cans by demonstrators,said the government was "fully functional". The government is coming under fierce pressure fromIcelanders who are frustrated by the handling of a financialcrisis that has wreaked havoc with the island's economy.Opposition politicians and demonstrators have called for Haardeand other senior officials to resign. "The government is still fully functional and the coalitionparties are going to continue their cooperation as confirmed tome today by Ingibjorg Gisladottir," he told journalists aftermeeting with lawmakers from his Independence Party. Foreign Minister Gisladottir is head of the SocialDemocratic Alliance, which forms a coalition government with theIndependence Party. That support was not matched by some party members inReykjavik who passed a resolution demanding the party leave thegovernment.

The vote by the party's biggest and most influentialdistrict, was approved at a late-night meeting surrounded byhundreds of anti-government protesters. It also demanded thatgeneral election be called no later than in May. "The message this large body within the party is sending itsleadership is very clear," said Agust Olafur Agustsson, vicechairman of the Social Democratic Alliance. "This body is calling for an election, but until anythingelse is decided, we will continue to work faithfully with theIndependence Party," he told Reuters after the meeting. Television footage from channel RUV showed protestersbanging on Haarde's black limousine and then pelting it witheggds outside the government building The vehicle managed to drive away after riot police arrived. PARLIAMENT PROTESTS The protest also left the government building splatteredwith eggs and paint.

The demonstrators then moved off toparliament and by evening about 3,000 protesters had gathered toface riot police surrounding the Althing, hurling fire crackersat the building and chanting "disqualified government". One demonstrator scaled the face of the parliament building,reaching a balcony from which he hung a sign reading "Treasondue to recklessness is still treason". The volcanic island's economy is expected to suffer a hugecontraction this year while unemployment, once close to zero, isset to soar. "People feel that it is incredible that after such a policydisaster that we faced last year, there has been no resignation,no minister, no one has resigned or responded, or takenresponsibility for what happened," said Gunnar HelgiKristinsson, a political scientist at the University of Iceland. Kristinsson said there was a substantial likelihood thegovernment would not survive the coming two weeks "I think it is more likely than not. It could happen today,next week or the weekend at the end of the month, especiallysince the Independence Party convention will be held nextweekend," he said. Haarde's Independence Party is due to begin a nationalcongress of its members on Jan.