UPDATE 1-Tunisia president to sack cbank head in policy row

Tunisias central bank governor Kamel al-Nabli will be sacked due to disagreements over economic policy, the spokesman for the presidency said on Wednesday, a move that could alarm investors already jittery after last years revolution.

"The president has taken, in agreement with the prime minister, the decision to end the mission of the central bank governor. The decision has been referred to the constituent assembly for approval," Adnen Moncer told Reuters.

"The reason is linked to the administration of the bank and the financial affairs of the country in recent months."

Tunisia, struggling to emerge from recession, has held a steady course on inflation, interest and exchange rates even in the turmoil that followed the ousting of veteran dictator Zine al-Abidine Ben Ali in January last year.

But tensions have emerged in recent months between the government and the central bank over who has the last say in monetary policy.

When the government unveiled an inflation target for the year, Nabli complained that this figure was set by the central bank and that he would not accept political interference.

The dispute has taken on political overtones and the three parties in the coalition government, led by the Islamist Ennahda party, said in May they were discussing Nablis removal.

The decision requires the approval of the constituent assembly, but is likely to pass.

Nabli is an academic who used to be chief Middle East economist for the World Bank. He was appointed days after last years revolution sparked upheavals that swept away veteran leaders in Egypt, Libya and Yemen.

Separately, Tunisian parliamentarians are pushing for a no-confidence vote in the Islamist-led government after its divisive decision to extradite Muammar Gaddafis prime minister sparked the countrys deepest political crisis since last years elections.