UPDATE 2-Kuwait govt calls for dissolution of parliament - KUNA
* Move expected after parliament fails to convene
* Court ruling caused latest upheaval
* Political turmoil holding up investment and reforms
(Adds quotes, background)
By Sylvia Westall
KUWAIT, Oct 3 (Reuters) - Kuwait's cabinet has asked the country's ruler to consider dissolving parliament, state news agency KUNA reported on Wednesday, in a widely expected bid to clear the way for a new election and end months of political deadlock.
Kuwait, a major oil producer and U.S. ally, has a relatively open political system by Gulf standards, and has avoided an uprising like those that have ousted dictators in four Arab states since early last year.
But tensions have grown between its elected parliament and the government, which is dominated by the ruling Al-Sabah family. The emir is Sheikh Sabah al-Ahmad al-Sabah.
Kuwait has been unable to hold a parliamentary session for several months after its Constitutional Court effectively dissolved the opposition-dominated assembly which was elected in February, basing its decision on a technicality.
The ruling in June reinstated the previous parliament, originally elected in 2009 and which contained more government supporters, but the body has not been able to convene due to a boycott by lawmakers.
"A draft decree to dissolve the 2009 parliament was submitted to the emir ... because it was not possible to hold sessions of the National Assembly due to a lack of quorum," information minister sheikh Mohammad al-Mubarak al-Sabah said, according to KUNA.
If the emir grants the request, it will be the sixth dissolution of parliament since 2006. Parliamentary elections should be held within 60 days.
Political turmoil has held up a 30 billion dinar ($108 billion) economic development plan and this year's phase of the project was rejected by opposition deputies in April.
The plan is supposed to provide a series of infrastructure projects including a new airport terminal, new oil refinery and hospitals, and was aimed at diversifying the economy and attracting foreign investment.
The latest deadlock has frozen parliamentary debate - the 2012 assembly was not even able to approve a budget for the current financial year. The majority opposition bloc, dominated by Islamist and tribal lawmakers, pushed two government ministers out of their jobs during that legislature.
In another ruling last week, the Constitutional Court rejected a government bid to change voting boundaries, leaving it without a clear long-term option to resolve the political crisis.
The ruling suggested that a new assembly, whenever it is elected, will likely have a similar make-up to the one elected in February and could prove just as obstructive to the government.
(Additional reporting by Mahmoud Harby; Editing by Andrew Heavens and Dan Lalor)
Keywords: KUWAIT POLITICS/GOVERNMENT