PRAGUE/WARSAW (Reuters) -- The Czech Republic said on Friday it would likely drop its opposition to an EU-wide deal on sales tax, raising the chances that a row between several newcomers to the bloc against older members may be resolved by today's deadline.

Austria, which holds the European Union's rotating presidency, proposed earlier this week an agreement that would allow value-added tax (VAT) on selected services in several member states to be kept lower than EU norms.

The Czechs, Poles and Cypriots refused to sign up to it, angering several long-time EU members and provoking thinly veiled threats of reprisals.

The three argued that the Austrian proposals discriminate against newcomers, which have cut-off dates to abolish tax breaks and meet higher rates in line with EU requirements.

But Czech Prime Minister Jiri Paroubek said his country was likely to accept the deal after earlier talks held by his finance minister with partners in Austria, Poland, Cyprus and the EU's executive arm, the European Commission, allowed it to clarify some aspects of the Austrian proposal. "It so far has aspects of a preliminary deal," Paroubek told reporters in Prague. "I would say that this agreement matches our ideas in some 80 to 90 percent which is in our view a very acceptable compromise."

He said Poland now looked to hold the key to a final deal.

"I would be pleased if we manage to win the Poles for this agreement as well," he added.

Without an agreement that needs to be signed off by all 25 EU members, some old EU states would end up violating EU laws if they failed to increase VAT on services such as hairdressing or home repairs.

An exception to keep them below the standard minimum rate of 15 percent expired in December.

Austria gave the dissenters until the end of this week to say a final word.

Paroubek said the final Czech position would likely be announced on Saturday after talks with Austrian Chancellor Wolfgang Schuessel and Polish Prime Minister Kazimierz Marcinkiewicz.

Marcinkiewicz said on Friday his government had already agreed its line, but the finance ministry in charge on the talks refused to reveal any details, saying only it had explained its position in a letter to Austrian authorities.

"The government will await the Austrian presidency's reaction to this letter," it said without elaborating.

A senior diplomat involved in the negotiations said earlier on Friday that Poland was the most difficult of the opponents.

"It's cleared with Cyprus and it will be with the Czech Republic, but the Poles are very tough," he said in Salzburg, where EU ambassadors met on the fringes of a conference.

"It's become a question of national pride in Poland and they are wondering how to get out of this impasse," he added.

Paroubek said the Czechs had clarified that under the deal they could keep a lower VAT rate on building new flats deemed to be 'social housing' even after their exemption allowing a lower rate on all home building work expires in 2007.