Reuters International

Ciudadanos party leader Albert Rivera gestures upon arriving at a news conference at the party's headquarters in Madrid, Spain, June 27, 2016. REUTERS/Susana Vera -

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MADRID (Reuters) - The small, liberal Ciudadanos party will neither back nor block a government led by Spain's conservative People's Party (PP), leader Albert Rivera said on Tuesday, his most flexible stance yet after months of political deadlock and a repeat election.

The PP won a general election in June, the second in six months, but did not secure a majority. Its leader, acting Prime Minister Mariano Rajoy, must therefore convince other parties to join a coalition government or to at least abstain from a vote of confidence that could block it.

Spain's political scene has fragmented in recent years as upstart parties, including Ciudadanos, formed in the wake of Europe-imposed austerity measures during an economic crisis.

"We are not going to be in the government, nor are we going to support it," said Rivera, whose market-friendly party lost seats in the second vote. He said his party still had to decide how to vote on any investiture vote for Rajoy on Wednesday.

However, Rivera said there should be no repeat of the long-winded negotiations to form a government of the last six months and said he was ready to doing his part to solve the deadlock.

"We all have to give in on something. Given the election results, we cannot still be going on like this 18 days afterwards. We have to change and form a government as soon as possible," Rivera said.

His stance was more conciliatory than previous statements from Ciudadanos, which last week also dropped its veto of a PP-led administration if Rajoy was at its head.

Ciudadanos came fourth in June's election, grabbing 32 seats. This is not enough to enable on its own any majority or minority PP government, but an abstention would increase pressure on the Socialists, who came second with 85 seats, to follow suit.

The Socialist party has so far said it would not support a PP government or abstain from a vote of confidence, but analysts believe they could change their mind in order to avoid a third election.

(Reporting by Maria Vega Paul and Sonya Dowsett; Editing by Julien Toyer and Raissa Kasolowsky)

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