Spain Socialists reject Rajoy or PP-led government
Spanish Socialist leader Pedro Sanchez has said he will not support a government led by acting Prime Minister Mariano Rajoy or his conservative Popular Party (PP).
After a brief meeting with the prime minister, Mr Sanchez insisted Spain needed a change of government.
"No to Rajoy means yes to change," he said, adding that he did not want fresh elections.
The Popular Party won Sunday's vote but fell well short of securing a majority.
For decades the Socialists and PP have alternated in government but the rise of two new parties, the left-wing Podemos (We Can) and liberal Ciudadanos (Citizens), has left Spanish politics fragmented.
The PP picked up 123 seats - far short of the 176 minimum needed to govern alone - while the Socialists (PSOE) won 90 seats, Podemos 69 and Citizens 40.
Shortly before Mr Sanchez went into his meeting with the acting prime minister at Madrid's Moncloa Palace, Ciudadanos leader Albert Rivera called for a pact between the three parties.
He said they would exclude Podemos, "which wants to break Spain up".
Podemos, unlike the others, backs the Catalan nationalists' call for a referendum on independence from Spain.
Mr Rajoy is also firmly opposed to any Catalan referendum on independence, while the Socialists say they are prepared to discuss constitutional reform.
Mr Rajoy did not comment publicly after the talks, which were the first to take place since the 20 December election and were described as barely 40 minutes in length.
But the Socialist leader was clear: "The PSOE will not support the continuity of Rajoy and the PP because the people voted for change."
Mr Rajoy's deputy, 44-year-old Soraya Saenz de Santamaria, has emerged as a powerful figure in the PP but Mr Sanchez's remarks appeared to rule out any compromise involving her becoming prime minister.
Ms Saenz de Santamaria took part in the first two election debates on TV, after Mr Rajoy decided not to take part.
When Spain's parliament reconvenes in January, King Felipe VI will ask a party leader to form a government and MPs will vote on his nomination.
If they fail to elect a government within two months then fresh elections will follow.
The election result on Sunday was seen as a rejection of traditional Spanish politics, dominated by the PP and PSOE since the nationalist dictator Francisco Franco died in 1975.
The PP's vote took a battering because of a party funding scandal and widespread anger over economic austerity. Spain's 21% unemployment rate remains one of the highest in Europe, and inequality grew after the financial crisis.
There is speculation that a left-wing coalition government could be formed - along the lines of neighbouring Portugal. But there are serious divisions between the PSOE and Podemos - and together they would still be short of a majority. They might have to woo small leftist parties in the Basque Country and Catalonia.
Doing the post-election sums:
- Grand coalition: Spain has never had a so-called grand coalition that would bring the Popular Party and the Socialists together - and the Socialists said on Monday they would not join a grand coalition
- Grand coalition pact: Ciudadanos (Citizens) leader Albert Rivera wants the PP and Socialists to join with his party to prevent Catalonia moving to independence
- Coalition of losers: The Socialists could link up with Podemos and Ciudadanos in a move that would echo the outcome of elections in Portugal last month
- Regional solution: The Socialists could also strike a deal with Podemos and smaller regional parties that won just a few seats each, thereby removing the need for a deal with Ciudadanos