PORTUGAL’S caretakeer Prime Minister Pedro Passos Coelho announced yesterday that he expects President Anibal Cavaco Silva to give the go-ahead to his right-wing coalition to form a new government.

However, he has failed to persuade Socialist Party leaders to share power, leaving him outnumbered in parliament by left-of-centre deputies.

Mr Passos Coelho’s allies announced on Tuesday night that they had made no progress in talks on creating a stable government since the October 4 general election.

Socialist Party leader Antonio Costa is intent on persuading the Left Bloc and the CDU alliance of the Communist Party and Greens to back a government led by him.

An alliance of these parties would have a majority of seats, but the Left Bloc and CDU fiercely oppose austerity policies imposed as part of Portugal’s €78 billion (£58bn) bankers’ bailout in 2011 and want a debt renegotiation.

The Socialists claim to oppose austerity but have pledged to abide by EU fiscal regulations.