UPDATE 3-Spain's Podemos party rejects Sanchez's plan for cabinet

Spanish Socialist leader Pedro Sanchez's hopes of staying on as prime minister suffered a setback on Thursday when supporters of the far-left Podemos voted to back him only if the party gets key roles in his future cabinet. Parliament will vote next week on whether to confirm or reject Sanchez as premier, a role he has held on an acting basis since failing to win a majority in a parliamentary election in April. If he is not confirmed in the role, a repeat election is likely for November.

An alliance of the Socialists with Podemos, their most natural political ally, 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. Podemos wants top jobs for its leader Pablo Iglesias and others as part of a coalition government, and Sanchez has offered only some lower-ranking posts.

In a move strongly criticized by Sanchez, Podemos consulted its members on whether the party should demand that top officials be part of government as a condition for supporting Sanchez in the parliamentary vote. That was backed by 70% of the party's supporters who took part in an internal vote, Podemos said on Thursday evening.

The divide between both parties had already widened earlier in the day when Sanchez ruled out having Iglesias in his cabinet. "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 for Mr Iglesias to 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. 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.

A repeat election would be the fourth parliamentary ballot in as many years in Spain, where politics have fragmented with the emergence of new parties, notably the far-right. Sanchez became prime minister in June last year, taking over from a six-year conservative government hit by a corruption scandal.