Spanish election: Socialists reject PP coalition offer

Spain's Socialist Party has rejected proposals to form a grand coalition with the Popular Party (PP), which won most seats in Spain's repeat election.

The Socialists came second, left-wing Unidos Podemos were third and centre-right Ciudadanos came fourth.

The vote has failed to break six months of political deadlock since December's inconclusive poll.

Acting Prime Minister Mariano Rajoy of the PP has said the result gives him the right to resume office.

The PP won more votes than at the previous election, but still did not have enough to form a majority government.

"We are not going to support Rajoy's investiture or abstain," said Socialist party spokesman Antonio Hernando.

Mr Rajoy said that in the absence of a stable coalition, the government would be forced to govern "day by day".

Read more: Spain's lost months of politics

The PP celebrated in Madrid after the election, but political deadlock remains

Official results gave the PP 137 seats in the 350-seat parliament, up 15 from the 122 it won in the December ballot.

The PP now faces a similar challenge to form a government as after the December poll. It needs support from a number of other parties in order to achieve a voting majority.

Analysis - By Sarah Rainsford in Madrid

The prospects of resolving the political stalemate do not look good.

It was the failure of previous attempts to agree a coalition that sparked a re-run of the ballot in the first place, and Sunday's election resulted in no major changes.

The PP won the election and even increased its support - but not by enough to govern alone.

So once the celebrations stop, the wrangling over coalitions will begin and it will not be easy.

The other surprise from Sunday's vote was that the left wing protest party Podemos did not soar in the polls. It is possible that voters were turned off more radical parties after the UK voted to leave the European Union - and shook Spain's fragile economy.

Spain has endured six months of political paralysis. All parties are now under pressure to reach a compromise, form a coalition, and get back to the business of governing.

More from Sarah: Can Rajoy make victory count?

The Socialists won 85 seats, confounding an earlier exit poll suggesting the party would slip into third place, but still five fewer than in December.

All the other parties lost votes, seats, or both. Unidos Podemos and Ciudadanos, both relative newcomers, won 71 and 32 seats respectively.

Podemos emerged just two years ago in protest against austerity measures demanded by Brussels and had argued that the PP was discredited because of the chronic unemployment that has plagued Spain since the 2008 financial crisis.

The PP, however, said Spain's improved economic performance was proof that its policies have worked.

And Podemos leader Pablo Iglesias has denied his party is Eurosceptic, telling the BBC he was "sad" at the outcome of Britain's referendum.

Mr Rajoy's PP is still short of a majority

Socialist leader Pedro Sanchez says his party is the "foremost political power on the left"

Unidos Podemos leader Pablo Iglesias failed to beat the Socialists to second place