Outgoing Spain PM warns Socialists on hard-left Podemos

Outgoing conservative Spanish Prime Minister Mariano Rajoy on Saturday warned the Socialists they risked giving hard left group Podemos the whip hand in a new government coalition.

"The government which (Socialist leader) Pedro Sanchez is desperately seeking would be beholden to Podemos and humiliated by them," predicted Rajoy, who Friday abandoned his own attempts to head a new administration.

The Popular Party (PP) leader said, however, that despite his decision to withdraw due to lack of support in parliament a month after inconclusive elections, his offer to form an alliance with the Socialists and rightwing group Ciudadanos still stood.

"This pact has not been possible for the time being as Sanchez has refused to talk ... he talked to everyone bar the PP," Rajoy lamented, while recognising that the PP needed multiparty backing having failed to obtain an absolute majority.

The PP won the most seats (119) in the December poll but fell well short of an absolute majority in the 350-seat parliament.

Rajoy wants to form a "grand coalition" of the PP, the Socialists who came in second place winning 89 seats, and new centre-right party Ciudadanos which took 40 seats.

"There is an alternative -- a government formed by the Socialists, Podemos, the United Left and all the pro-independence (regional) parties.

"But they will do great harm to our country and will be unable to govern as we have a majority in the Senate," said Rajoy, warning of the damage a fractured political landscape could do to the country.

He warned that "radical and extremist economic policies can lead the country to ruin", but vowed the PP would use its absolute Senate majority to "guarantee such wrong-headedness does not come to pass" and "preserve Spanish unity."

Podemos leader Pablo Iglesias said Friday his party hoped to form an alliance with the Socialists and the United Left, the latter a green-communist grouping, as well as land the post of deputy premier and key ministries.

El Pais daily Friday warned in an editorial that Iglesias was "setting a trap" for the Socialists.

A left-wing coalition government would still need the support of tiny Catalan and Basque nationalist parties to survive a confidence vote in the event that Ciudadanos swings behind the PP.

Parliament has two months from the first confidence vote to approve a new government before fresh elections are triggered.

A Socialist Party source told AFP on Saturday that "Pedro Sanchez and Pablo Iglesias will meet and talk -- a hand has been held out", while not giving a date.