BRUSSELS (Reuters) - The leader of the Flemish separatist N-VA party ended his bid to form a government in Belgium on Wednesday a month after the election, raising fears of another lengthy spell of political stalemate after the record 18-month impasse of 2010-2011.
Bart De Wever, the leader of the New Flemish Alliance (N-VA)Belgium's largest party, had been tasked with starting coalition talks by the king, but one potential partner walked away on Tuesday saying it did not trust the separatists.
"We still had some doubt about the N-VA and the trust we could put in them. If I say 'some doubt' it's a euphemism because it's a lot more than that," Benoit Lutgen, head of the French-speaking Christian Democrats, told broadcaster RTL.
De Wever met King Philippe on Wednesday and the palace said the N-VA chief had asked to end his mediation role. The king will start consultations later on Wednesday.
Analysts now believe the king may turn to acting Prime Minister Elio Di Rupo to start coalition talks, with the likely continuation of his government of socialists, liberals and Christian Democrats. But animosity between the former partners over regional governments means this will not be an easy task.
In 2010-2011, Belgium set a world record for the longest time to form a government.
The electoral system - effectively two elections with separate French-speaking and Dutch-speaking parties appealing to different voters - means at least four parties will be needed to form a governing coalition.
Governments need to comprise parties from the richer Dutch-language north, with more centre-right or separatist views, and those from French-speaking Wallonia in the south, where the Socialists are the dominant force.
During the election campaign, the N-VA had called for Belgium to be transformed into a looser confederation of largely independent regions, while calling for a reform of the welfare system including a limit on unemployment benefits.
In the negotiations with other parties, De Wever had prepared a proposal in which he watered down these demands.
He received support from the Flemish Christian Democrats and the French-speaking liberals, but the group needed a fourth party to form a parliamentary majority. That party, the French-speaking Christian Democrats, refused to join coalition talks.
When parties wrestled over a coalition in 2010, during the euro zone crisis, volatile markets saw the bonds of debt-laden Belgium dumped, sending the yield on 10-year paper to almost 6 percent.
Economists say a political stalemate may be less damaging this time, although public sector debt is around 100 percent of GDP, the sixth highest in the 28-member European Union.
"We are taking the big risk of reviving what we don't want to revive, which is a long crisis of 541 days like we had in 2010," said Charles Michel, leader of the French-speaking liberals.