MADRID (Reuters) - Spain's Socialists on Sunday were expected to clear the way for the conservative People's Party (PP) to be sworn in for a second term, ending a 10-month political deadlock that has paralyzed institutions and threatened to derail an economic recovery.
In an unprecedented move in Spain's modern politics, more than 250 members of the Socialists are meeting to consider abstaining in a new confidence vote due next week which would grant acting Prime Minister Mariano Rajoy a second term.
The result of the Socialist vote is expected to be announced by early afternoon.
Spain has had a caretaker government since December after no single party managed to win a clear parliamentary majority in two inconclusive elections which have broken the stable two-party system that the country has had since the 1970s.
Rajoy's PP won the most votes in the two ballots but failed to win a wide enough majority to form a government. In both elections, the Socialists came second place followed by newcomer parties Podemos and Ciudadanos, which together secured close to a third of Parliamentary seats.
To form a minority government, Rajoy needed sufficient support, or an abstention, from his rivals in a confidence vote, though deep party divides made reaching any accord impossible.
The Socialists, after denying Rajoy's reelection twice, were set to vote against him again under the leadership of Pedro Sanchez, sending the country into its third election in a year.
However, many in Sanchez' party feared voters would turn their backs on the Socialists, dropping them into third place behind leftist Podemos if another election was called.
The PSOE leader eventually stood down after a party revolt, leaving the Socialists under interim management which must decide on abstention before the end of October.
(Reporting by Julien Toyer; Editing by Paul Day and Toby Chopra)