MADRID (Reuters) - Spain's acting Prime Minister Pedro Sanchez will next Tuesday set a date for a parliamentary vote on whether he can stay on in the role, a Socialist party source said, triggering a two-month countdown that could potentially lead to a new election.
Sanchez's Socialists won a national election in April without securing a majority of seats in a fragmented assembly, meaning they need to secure the support of other parties to govern.
While government sources say they are confident Sanchez will be confirmed as prime minister, talks with potential partners have stalled. The Socialists insist there is no alternative and say they will seek parliament's backing even if they have not secured the necessary support beforehand.
"Spain has no time to waste and needs a government as soon as possible," the Socialist Party source said. "Our country needs to move forward and Pedro Sanchez wants to lead that project with responsibility."
Sources in both the Socialist party and far-left Podemos, seen as the closest possible ally to Sanchez, said late on Tuesday that discussions were stuck.
Podemos wants to be part of a coalition government but Sanchez is only willing to agree to a "cooperation" pact with lower ranking positions in the administration.
Podemos leader Pablo Iglesias said on Wednesday he was confident that Sanchez would eventually agree to the coalition government Podemos wants.
"The only way things can change in this country is via a coalition government," Iglesias said, adding that he believed that Sanchez's Plan A was too secure the support of centre-right party Ciudadanos.
"The second possibility is a coalition government with us. And I want to reassure you on that. Such a coalition deal is closer than one may think."
Iglesias gave no details but pointed to the fact that he did not believe that Ciudadanos, which has repeatedly ruled out backing Sanchez, would help him stay on as prime minister.
Once parliament votes on whether to confirm Sanchez as prime minister, that triggers a two-month deadline during which he can seek the assembly's backing.
If this fails, there will be repeat elections.
If he does get confirmed as prime minister, the fragmentation of parliament and the challenges in finding partners raise questions on how much he could achieve, starting with a tricky vote on the country's budget.
"I'm afraid that the parties have entered into a game of chicken that could cause significant damage," said Pablo Simon, a political science professor at Madrid's Carlos III university.
"They should think about the risk of a repeat election, because we saw in 2016 that improving governability with a repeat vote is complicated, the outcome could be quite similar and would force them to negotiate anyway."
All this happens, at a time when Sanchez, thanks to his victories in the national, local and European elections, has succeeded in getting Spain at the negotiating table for EU top jobs.
(Additional reporting by Andres Gonzalez; Editing by Toby Chopra)
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