Representatives of the conservative Austrian People's Party (ÖVP) and the Social Democrats (SPÖ) met in the nation's chancellery for talks on Saturday after the failure of their discussions with a further party for a three-way coalition.

Austria's conservative Chancellor Karl Nehammer said Saturday he would step down in the "coming days" after breaking off coalition talks with the Social Democrats over disagreements on key issues. "After the break-off of the coalition talks I am going to do the following: I will step down both as chancellor and party chairman of the People's Party in the coming days and enable an orderly transition,

Following the failure of talks to form a three-party government in Austria, the Social Democrats (SPÖ) are is ready for talks on a potential coalition with the conservative Austrian People's Party (ÖVP),

Austria's conservative chancellor's party ÖVP has broken off coalition negotiations with the social democratic SPÖ. This was reported by the Deutsche Presse-Agentur from party circles.

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.

Collapse underlines difficulty of forming governments in European countries where far-right on rise but parties refuse to partner with them.

Austrian Chancellor Karl Nehammer said he planned to resign in the coming days after talks between his conservative party and the Social Democrats to form a new government collapsed on Saturday, casting the nation into a political crisis.