Parliament will vote next week on whether to confirm or reject Sanchez as premier, a role he has held on an acting basis since winning an inconclusive national election in late April. If he is not confirmed in the role, a repeat election is likely.

An alliance of the Socialists and Podemos would bring Sanchez almost within touching distance of the parliamentary majority he needs.

But the two parties have so far been unable to clinch a deal, with Podemos saying it wants top jobs in the cabinet for its leader Pablo Iglesias and others, and Sanchez offering only some lower-ranking posts.

"What I offered is that we include qualified people from Podemos and the disagreement again was on the participation of Mr Iglesias in government," Sanchez told laSexta television.

"It is not possible that Mr Iglesias be part of the government," Sanchez added, citing policy differences on issues including how to handle Catalonia's independence drive.

Podemos said Sanchez's comments were unacceptable.

"It is obvious that vetoing Pablo Iglesias is vetoing all of us. It is to veto Unidas Podemos, all its leaders and its 3.7 million voters," Pablo Echenique, a high-ranking official of the party, said on Twitter.

Podemos has consulted its members on whether the party should demand that Iglesias and other top officials be part of government in order to back Sanchez. The outcome is expected late on Thursday or on Friday.

Sanchez also renewed calls for the conservative People's Party and centre-right Ciudadanos to abstain when parliament votes next week in order to allow him to be sworn in as prime minister. Both have repeated rejected that option.

If no deal is reached in parliament next week or possibly in September, a repeat election would be held on Nov. 10. If Sanchez is confirmed as prime minister, the question would remain as to what he could achieve in power given the fragmented nature of Spanish politics.