BRASILIA, Jan 18 (Reuters) - President Dilma Rousseff's opponents within her main coalition partner, the fractious Brazilian Democratic Movement Party (PMDB), are losing hope that they can impeach the leftist leader and replace her with their man, Vice President Michel Temer.
A Supreme Court ruling last month that expanded the authority of the Senate, where she has a more solid backing, and reduced the clout of lower house speaker Eduardo Cunha, her arch enemy who triggered the impeachment process, has weakened the bid by opposition parties to unseat Rousseff.
Her critics accuse Rousseff of manipulating government accounts to boost public spending during her 2014 re-election campaign.
But in recent weeks, a growing consensus has emerged in Brazil's political establishment that the evidence against Rousseff is too flimsy to justify impeachment.
Her government is confident it has more than the one third of votes she needs in each chamber to block impeachment.
"The momentum for impeachment has lost force, yes, due to the brutal interference of the Supreme Court in a legislative matter," said Darcisio Perondi, a PMDB congressman, who believes Rousseff must be ousted if Brazil is to recover from its worst recession since the Great Depression of the 1930s.
Rousseff's fiercest critics inside the PMDB are now focusing their efforts on a party convention in March, where they will push to leave the ruling coalition. They hope that will bring her government down just over a year into her second term.
Popular frustration with Rousseff has been fueled by the brutal contraction in South America's largest economy and a massive corruption scandal at state-run companies.
But, while Rousseff's approval ratings are near record lows, anti-government demonstrations since the start of impeachment proceedings last month have so far failed to match the scale of protests in 2013 and early last year, that drew hundreds of thousands onto the streets.
Perondi said the fight is now on to break with the Rousseff administration at the convention in the first half of March.
"If we stay, we will be telling the country we do not want change and we will go down with Rousseff's Workers' Party that will be badly defeated in municipal elections in October," he said.
The PMDB, which controls both chambers of Congress, has six cabinet ministries plus the vice presidency and party barons are split over whether to relinquish power so far ahead of the 2018 presidential race when it plans to field its own candidate.
"I don't see the party leaving the government in March," said a senior PMDB official, who requested anonymity because the matter is so sensitive within the party. "The convention will decide on a gradual exit, preparing for a PMDB candidacy in 2018."
The Supreme Court ruling in December was a big setback for speaker Cunha, who is fighting for his own political life in the face of charges that he received kickbacks in the graft scandal surrounding state-run oil company Petroleo Brasileiro SA (Petrobras) and had secret accounts in a Swiss bank.
In Brasilia's modernistic Planalto presidential palace, there is a palpable sense of relief that the threat of impeachment has subsided, though Rousseff aides say they are not letting down their guard.
"The impeachment has lost steam for sure," a PMDB minister in Rousseff's cabinet told Reuters, on the condition he not be named. "It became clear to Brazilians that you need a crime to start the process, and there is no crime."
Rousseff has denied any wrongdoing but a recent corruption allegation against her chief of staff Jaques Wagner renewed fears that the president could become implicated in the widening probe of bribes and kickbacks on contracts with Petrobras.
Any evidence that her 2014 re-election campaign was funded by graft money would reignite efforts to impeach her and to annul her election in the electoral court.
A shrinking economy and rising inflation could also spark new protests against Rousseff, who is trying to restore growth despite the recent loss of Brazil's investment grade credit rating.
Any of these scenarios could boost the anti-Rousseff faction within the PMDB, an umbrella party with no defined ideology that is an unreliable ally at the best of times.
Last year, Temer was presenting himself as the man to pull Brazil out of crisis if Rousseff was impeached. Now he is more concerned with surviving as the PMDB's leader at the convention in March, where members who favor quitting the government will try to replace him. A survey by Arko Advice consultancy found that Temer is likely to prevail.
"We've never enjoyed the full support of the PMDB," said a Rousseff aide. "Yet we are confident they will continue to be part of the government for now and back the president so she can serve out her term." (Reporting by Anthony Boadle; Additional reporting by Leo Goy and Alonso Soto; Editing by Kieran Murray)