Spain's acting Prime Minister Mariano Rajoy on Friday abandoned attempts to form a government due to lack of support in parliament, a statement issued by the country's royal palace said.
"His majesty the King nominated him to form a government. Mr Mariano Rajoy thanked his majesty the King but declined the offer," the statement said, a month after inconclusive elections.
The king will now call for a fresh round of consultations to choose another candidate.
Rajoy's conservative Popular Party (PP) won the most seats (119) in the December poll but fell well short of an absolute majority in the 350-seat parliament.
Rajoy had called for a "grand coalition", but with no party expressing any intention of voting for him, he decided to withdraw.
"For the moment, I don't have the necessary support. I am maintaining my candidacy but I cannot present it today because not only do I not have a majority but there is a majority against me," he told reporters.
Meanwhile, the leader of Spain's anti-austerity party Podemos said it was ready to form a government with the Socialists, making a left-wing governing alliance more likely.