Austria headed on Sunday towards coalition talks led by the far-right Freedom Party (FPO) after efforts to form a centrist government without the FPO fell apart and prompted Chancellor Karl Nehammer to resign.

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Nehammer, who announced he was quitting late on Saturday, had led three- and then two-party talks aimed at forging a centrist coalition that could serve as a bulwark against the eurosceptic, Russia-friendly FPO, which came first in September's parliamentary election with around 29% of the vote.

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Nehammer's conservative People's Party (OVP) appointed Secretary-General Christian Stocker on Sunday as its new leader in an interim capacity. Stocker has long repeated Nehammer's position that the OVP would not govern with FPO leader Herbert Kickl, but said on Sunday things had now changed.

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"I expect that the leader of the party with the most votes will be tasked with forming a future government. If we are invited to these (coalition) talks, we will accept this invitation," Stocker told reporters.

"It is therefore not about Herbert Kickl or me, but about the fact that this country needs a stable government right now."

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The OVP is the only parliamentary party not to have ruled out a coalition with the FPO outright, and together they would have a majority in parliament. Nehammer focused his fire on Kickl, arguing he was a conspiracy theorist. Kickl insisted he would be chancellor in any FPO-led government.

President Alexander Van der Bellen, a former leader of the left-wing Greens who has voiced reservations about Kickl becoming chancellor, infuriated the FPO by not asking it to form a government soon after the election on the grounds that no other party was willing to join it in a coalition.

While saying the situation had now changed, Van der Bellen stopped short of tasking Kickl with forming a government. He is due to meet Kickl at 11 a.m. (1000 GMT) on Monday.

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"Voices within the People's Party that rule out cooperation with an FPO under Herbert Kickl have become much quieter. This in turn means that a new path may be opening up that did not exist before," Van der Bellen said in an address to the nation.

Growing support for FPO

The FPO has been a junior partner in coalition governments before, most recently with the OVP from 2017 to 2019, but it has never led one since it was formed in the 1950s under a leader who had been an SS officer and Nazi lawmaker.

The failure of Nehammer's coalition talks highlights the growing difficulty for centrist parties in many European countries in forming stable governments without a far right that is gaining ground.

Opinion polls suggest FPO support has continued to grow, extending its lead over the OVP and Social Democrats to more than 10 percentage points while their support has shrunk.

The OVP and FPO overlap on various issues, particularly taking a tough line on immigration.

The thorniest issue in the centrists' talks however was how to shrink the budget deficit, which is forecast to exceed the EU's limit of 3% of economic output in 2024 and 2025.

While both parties call for tax cuts, the FPO has pledged to take a knife to some of the OVP's vested interests, such as the powerful Chamber of Commerce. They clash over the FPO's opposition to aid for Ukraine in its war against Russia, and current plans for a missile defence system.

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The FPO, which is allied with Hungarian Prime Minister Viktor Orban's Fidesz party, says it is defending Austria's neutrality.

Kickl issued a short statement on Facebook denouncing the failed talks.

"We are not responsible for the lost time, chaotic conditions and enormous damage to trust that has been caused," he said.

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