By Blanca Rodríguez
MADRID (Reuters) - Spain's acting prime minister Mariano Rajoy struggled on Wednesday in his bid to form a government after the centrist Ciudadanos party insisted he meet their demands before talks and the Socialists renewed their pledge to oppose him.
Spain has been in political limbo since two inconclusive national elections in December and June delivered the most fractured parliaments in four decades.
Subsequent attempts by political parties to reach agreement on a government have so far failed but Ciudadanos ("Citizens")raised prospects of a breakthrough last week when it offered Rajoy their support in return for signing a six-point package of political reform.
Rajoy, whose conservative People's Party (PP) won the most votes in the elections, was expected to accept the reform package but instead emerged from a meeting of PP leaders on Wednesday saying only that he had won a mandate to talk to Ciudadanos.
He did not clarify his party's stance on the reforms, which would involve launching a parliamentary investigation into an alleged PP slush fund.
"Spain needs a government right now and not new elections," Rajoy told reporters after the PP gave him a free rein to hold further talks with Ciudadanos. "What Spain needs now is an agreement to form a government."
Ciudadanos made clear it would only talk to Rajoy if the PP first accept its reform plan, which aims to tackle corruption and change Spain's voting system.
"As long as Rajoy does not take decisions or accept the conditions, negotiations will not begin and we will remain in the same situation that we were before," Jose Manuel Villegas, a Ciudadanos leader, told journalists.
Rajoy was due all the same to meet Ciudadanos leader Albert Rivera on Thursday.
A pact between the PP and Ciudadanos already faces significant hurdles as the two parties would still be short of a majority in parliament. That means Rajoy would also need the backing of the opposition Socialists in a parliamentary vote to invest him as prime minister.
But the Socialists baulked at this possibility, which both Rajoy and Ciudadanos have proposed.
"What Mister Rajoy wants is to govern without opposition," Socialist leader Pedro Sanchez said. "We are not going to support what we want to change."
Sanchez added that forming a stable government "is not done with blackmail, but with dialogue."
Rajoy insisted that if agreement is not reached quickly, Spain could face yet another election. But a third vote would be unlikely to break the deadlock as polls have shown little change.
"Ciudadanos has taken a step forward, the Socialist party has not taken a single one," said Rajoy.
(Additional reporting by Sarah White and Angus Berwick, Writing by by Axel Bugge; Editi)