Portugal could be heading to its third general election in three years after the centre-right government of Prime Minister Luis Montenegro lost a vote of confidence on Tuesday evening. 

The vote was called over conflict-of-interest accusations against Montenegro involving a family business. A last-minute attempt to avoid the vote failed when terms could not be agreed for setting up a mooted parliamentary inquiry.

The government "tried everything right up to the last minute to avoid snap elections," Montenegro said when leaving parliament.

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The Socialist Party (PS), the main opposition party, and the far-right Chega party both voted to bring down the government. 

The country's president, Marcelo Rebelo de Sousa, must now decide whether to dissolve the assembly and call new elections.

Montenegro, 52, in office for less than a year, told the start of a parliamentary debate on a vote of no-confidence that "I have committed no crime".

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Parliament debated the confidence motion for more than three hours, with the PS insisting that Montenegro cooperate with a special parliamentary inquiry into the business affairs of his family. 

But the sides failed to agree on the terms of the inquiry, and the confidence vote went ahead. 

"Today's vote will determine whether we go to elections and whether the Socialist Party will ally with the far right to bring down the government," Montenegro had told parliament earlier on Tuesday. 

A new election could see the far-right Chega (Enough) party make further gains after it became Portugal's third-largest political force in the March 2024 legislative elections, when it increased its seats from 12 to 50, and won 18 percent of the popular vote.

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- 'Cowardly resignation' -

On Monday, the PS had formally requested the parliamentary commission of inquiry into Montenegro's possible conflict of interest.

The prime minister had already responded in writing to the opposition's queries, "but these written replies are not enough to lift suspicions," PS leader Pedro Nuno Santos said on Monday.

Montenegro said on Saturday that he had called the confidence vote because of the risk of prolonged instability.

Santos said that move amounted to a "cowardly resignation". 

The prime minister told CNN Portugal on Monday that he would stand again if De Sousa called fresh parliamentary elections, which would be held probably on May 11 or 18.

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De Sousa has summoned the parties on Wednesday, and on Thursday will convene a meeting of the State Council.

Social Democratic Party leader Montenegro took office in April last year but without an absolute majority in parliament. 

The main allegation against him concerns a service provider owned by Montenegro's wife and children.

Portuguese media reported allegations that the firm had contracts with several private companies that rely on government contracts.

Media have also reported alleged irregularities in the purchase of a flat. 

Montenegro, who had already survived two censure votes, denies any wrongdoing.

Since the allegations surfaced, he has pledged to put ownership of his family business exclusively in the hands of his children. This has been deemed insufficient by the opposition. 

Montenegro became prime minister after socialist Antonio Costa resigned in November 2023 under the shadow of a corruption probe. 

Costa, who denies accusations of influence peddling levelled against him, was elected head of the EU's European Council in June 2024.