LISBON : Portugal’s Socialist Party on Friday rejected plans for a new centre-right minority government which outgoing Prime Minister Pedro Passos Coelho has been asked to form, insisting they could assemble their own coalition.

Passos Coelho’s ruling bloc took more than 38 percent of votes in the October 4 election despite overseeing four years of painful austerity in the bailed-out country, but lost its absolute majority in parliament.

The president tasked Passos Coelho with forming a government on Thursday but less than a day later the Socialists were working on the details of an alliance with other left-wing parties — something which has not happened in 40 years of democracy in Portugal.

Neighbouring Spain and Germany have both voiced deep concern about the prospect of a left-wing coalition taking power in Portugal, which is recovering only slowly after emerging from a 78-billion-euro ($88-billion) international bailout last year.

The threat to Passos Coelho was thrown into sharp relief Friday as the Socialists, who came second in the vote, declared they would “not endorse the formation of a government” by the centre-right. Socialist leader Antonio Costa insisted he can form a government with support from the Left Bloc party, Communists and Greens.

“It is incomprehensible to name a prime minister who the president knows in advance will not be able to hold majority support in parliament,” Costa said. His party insisted they would “be able to propose a coherent alternative government, stable and durable”, which “guarantees integral respect for Portugal’s international commitments, notably its European ones”. The Socialist Party, the Left Bloc — allied with Greece’s anti-austerity Syriza party — the Communists and Greens won 122 of the parliament’s 230 seats, compared with 107 for the right-wing coalition.