BOMBAY, Aug 7 (Reuters) - India’s ultra right wing Hindu party, Shiv Sena, said on Tuesday it was prepared to leave Prime Minister Atal Behari Vajpayee’s government after a spat between the coalition partners.

"You want to break the coalition... break... we are ready (to leave)," Shiv Sena chief Bal Thackeray told reporters when asked about the party’s troubled relationship with its long-time ally, the Bharatiya Janata Party (BJP), which heads the coalition.

Vajpayee’s 21-month-old coalition would not lose power if Shiv Sena left. The party has 15 parliamentary seats, while the coalition has 23 members more than the majority required to rule.

Vajpayee last week threatened to step aside as prime minister after he was apparently upset by a Shiv Sena deputy who linked his office to losses in the state-run giant mutual fund manager, the Unit Trust of India.

Thackeray said the deputy had apologised to the prime minister on Monday night.

"But I am watching their (BJP) behaviour. It is not proper to make a hasty decision now. Let us see whether there will be new threats from them. I am not one to keep quiet," he said.