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UPDATE 1-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 background)

KUWAIT, Oct 3 (Reuters) - Kuwait's cabinet has asked thecountry's ruler to consider dissolving parliament, state newsagency KUNA said on Wednesday, in a widely-expected bid to clearthe way for new elections and end months of political deadlock.

The major oil producer has been unable to hold aparliamentary session for several months after its top courteffectively dissolved the opposition-dominated parliament, whichwas elected in February, basing its decision on a technicality.

The ruling in June reinstated the previous assembly, whichcontained more government supporters, but the body has not beenable to convene due to a boycott by lawmakers.

The deadlock has frozen all parliamentary debate - theassembly was not even able to pass a budget for the currentfinancial year.

Political turmoil has held up a 30 billion dinar ($108billion) economic development plan. This year's phase of theplan was rejected by opposition deputies in April.

The plan, spread over four years until 2014, is supposed toprovide for a series of huge infrastructure projects including anew airport terminal, new oil refinery and hospitals and wasaimed at diversifying the economy and attracting foreigninvestment.

(Reporting by Sylvia Westall; Editing by Andrew Heavens)

((sylvia.westall@thomsonreuters.com)(+965 2240 8945)(ReutersMessaging: sylvia.westall.thomsonreuters.com@reuters.net))

Keywords: KUWAIT POLITICS/GOVERNMENT