* Babis fights accusations of secret police collaboration
* Parties mull ending screening to let him join government
* Czechs more tolerant almost 25 years after Communism ended
By Jan Lopatka
PRAGUE, Dec 4 (Reuters) - When Czechs threw off Communism in 1989, they adopted strict rules marginalising anyone with ties to the repressive old regime. But now they are asking whether it's time to move on.
The soul-searching has been stirred by Andrej Babis, a businessman-turned politician poised to join a new coalition government despite allegations - which he denies - of past collaboration with the Communist secret police.
A strict interpretation of current law says this would bar him from ministerial office, but a consensus is forming in the Czech Republic to allow him to enter the government. A deal on a coalition including Babis' party is expected in a few weeks.
The change of heart is the culmination of several trends.
First, the rules that have excluded tens of thousands of collaborators were designed to end the sway of the shadiest parts of the old regime on the young democracy, but it is now robust enough that those rules may be no longer necessary.
Second, Czechs have recognised that the law was crude in banning indiscriminately those who beat up people or snitched on friends as well as those who were forced to agree to spy under the threat of violence or persecution.
Finally, Czech voters are sick of official corruption and a stagnating economy, and feel there are more pressing issues than what may or may not have happened under Communist rule.
Babis, 59, who owns a swathe of chemicals and media companies worth $2 billion according to Forbes magazine, won 18.7 percent of the vote in last month's election, despite his widely reported past under Communism.
He was a Communist Party member but denies having been an informant for the Statni bezpecnost (StB), the Czechoslovak equivalent of old East Germany's Stasi secret police. He admits only to have met agents when he worked for a trading firm in the 1980s.
"I never signed anything," he said, accusing the current political establishment of using the accusations to keep him from power. "This matrix is afraid because I can't be corrupted by anyone," he told Reuters in an interview.
Babis, born in Slovakia during the era of the Czechoslovak federation, has gone to court to fight the Slovak Nation's Memory Institute, which says it has a file proving he was a collaborator. The dispute may take years to resolve.
IS QUARTER A CENTURY ENOUGH?
Bohuslav Sobotka, leader of the centre-left Social Democrats and the likely next prime minister, has come up with a plan that would alter the screening requirements.
"I am convinced that (almost) 25 years after 1989, the time has come to consider whether the screening law should be applied at all," he said in a television debate.
The Communists, the third biggest party in parliament, are proposing scrapping the screening law altogether.
Sobotka's comments indicated the idea might have more traction than before, or at least open the door to a less politically disputed solution.
Last week Sobotka agreed with Babis that parliament should quickly adopt a new public service law that would exempt ministers from screening.
Another way to get Babis into government would be making him a deputy prime minister, without giving him a concrete ministry to run. Some lawyers say this could change the vetting practice while formally obeying the law.
It would not go down well with some anti-Communists, and could cause some ripples in his own party.
"The most important thing is the moral justification," said Mikulas Kroupa, who heads Post Bellum, a group that collects memories of victims of communist persecution.
"Should this country be governed by people who snitched, beat up or in other way bullied their compatriots and loyally served the totalitarian regime? It should not."
STRICTER THAN OTHERS
The Czech law is stricter than rules applied in some other ex-communist states. In Poland, candidates for selected jobs merely have to declare if they were former communist agents or not. Slovakia scrapped vetting requirements in the 1990s, and Hungary does not apply any vetting process at all.
The StB files have been criticised for their questionable veracity. Another problem is that many were destroyed or vanished as security services "cleaned up" their files in 1989, possibly giving some collaborators a clean bill of health.
Vaclav Havel, the revered Czech dissident leader during the Communist era who was elected president afterward, favoured scrapping the law after five years.
Petr Kambersky, commentator at Hospodarske Noviny, said it would be wrong to change the law because of one man - Babis, but in general it had served its purpose.
"It was a good law at the time through which democracy tried to make sure that it is not undermined. Its defenders now argue by moral reasons but morality should not be governed by law. It is despicable that someone was an (StB) agent, but it is not a risk to democracy today." (Additional reporting by Robert Muller, Marcin Goclowski in Warsaw and Krisztina Than in Budapest, Editing by Mark Heinrich)