Poland's conservative prime minister-designate said on Friday he was ready to form a minority government as hopes for a last minute deal with the pro-business Civic Platform all but evaporated.
Civic Platform rejected as "hopeless" the latest compromise proposals on the economy from Prime Minister-designate Kazimierz Marcinkiewicz and ruled out going back to talks.
The party accused Law and Justice leaders Lech and Jaroslaw Kaczynski, whose victory in presidential and parliamentary elections led the media to call them Europe's most powerful twins, of having no interest in sharing power.
Earlier, Marcinkiewicz vowed to do his best to salvage the deal but admitted he was prepared to rule alone from Wednesday, the latest time by which he has to present a cabinet.
But Civic Platform, the second biggest party in parliament, dismissed the plans as not going far enough towards its free-market agenda.
The financial markets extended losses as more investors lost hope the two parties would deliver on their pre-election promise to jointly rule the new European Union member, still in need of reforms to consolidate its growing economic clout.
The zloty currency has lost 3 percent to stand on the verge of breaking key support at 4 against the euro since eurosceptic Lech Kaczynski defeated pro-business leader Donald Tusk in the Sunday presidential run-off.