Portugal’s Left Bloc said yesterday basic conditions are in place for it to form a leftist government with the Socialist Party and the out-going centre-right coalition will fail to win backing to govern.

Portuguese politicians have been wrangling over forming a government since an inconclusive October 4 election.

Economists say that long delays in forming a new government could undermine the economy’s revival after three years of recession induced by cuts and tax hikes under an international bailout that Lisbon completed last year.

“The government is over as of today, because it will not have support in parliament, but also because there is another government solution that corresponds to people’s expectations and that can be the alternative that the country needs,” Left Bloc leader Catarina Martins said.

The outgoing coalition won the most votes in the election but lost its majority in parliament, meaning that it would have to rely on the main opposition Socialists for support to pass legislation.

The Socialists have so far refused such support and have opted to also talk to the far-left.

Socialist leader Antonio Costa said there were “possible points of convergence” with the Left Bloc, especially on how to give more disposable income back to the Portuguese.

“The last two meetings have run very well, this last ran in a very interesting fashion. But it is premature to say whether an agreement is possible,” Mr Costa said.

Analysts have said they doubt a leftist government can be created because of large policy differences between the Socialists and the far left.

But Ms Martins said: “Conditions have been created for a basic consensus on the Left Bloc’s terms for allowing the creation of a government.”