By Sarah White and Julien Toyer
MADRID (Reuters) - Major parties holding the balance of power in Spain declined to support plans for a conservative-led government in talks with the King on Thursday, dashing hopes of a quick end to a seven-month political stalemate.
National elections in December and June both resulted in hung parliaments, forcing the parties to try to negotiate their way to a viable coalition - so far without success.
Party heads were meeting individually with King Felipe on Thursday - the fourth such set of talks this year - as they seek a consensus candidate to lead the next government.
Insiders were hoping a deadline to pass a budget for 2017 by the end of September will concentrate minds.
But the left-leaning parties, the second-placed Socialists and Unidos Podemos ("Together We Can"), reiterated after the talks with the King that they would oppose Rajoy.
Liberal party Ciudadanos ("Citizens"), which came fourth in the June 26 election, said it would abstain in a confidence vote.
"We want to change Rajoy's government and this is why we will vote 'no' in a confidence vote," Socialist leader Pedro Sanchez told journalists.
Without backing or at least an abstention from the Socialists, Rajoy would find it almost impossible to secure a majority for a second term in office.
Other smaller regional parties had previously all said they would vote against Rajoy as well, leaving his People's Party with 137 seats, well short of the 176 needed for an absolute majority in Spain's lower house.
Rajoy's PP was the only one of the four main parties to win more seats in June than in December.
He meets the monarch at 1500 GMT (11.00 a.m. ET), but the latest round of talks could well end with no candidate for prime minister emerging.
Many hope discussions over next year's budget may prove instrumental in coaxing the Socialists to eventually abstain in the investiture ballot and enable a PP government.
"If the PP wants our votes (for the budget), they'll have to agree to some of our proposals on elements that we absolutely want to have there," a Socialist source said prior to Thursday's meetings, without elaborating on what these elements might be.
(Editing by John Stonestreet)