ISTANBUL (Reuters) - Turkey is heading rapidly toward a new election and only the "will of the people" can break a political deadlock after the ruling AK Party failed to form a working government, President Tayyip Erdogan said on Wednesday.
Prime Minister Ahmet Davutoglu formally ended attempts to find a junior coalition partner on Tuesday after weeks of talks with opposition parties failed, handing the mandate back to Erdogan and making a snap election almost inevitable.
"Because of the failure to form a government, we have to seek a solution with the will of the people ... so we are heading rapidly toward an election again," Erdogan said in a speech to local officials, broadcast live on television.
Presidency sources said he would consult with the parliamentary speaker on the formation of a new government later on Wednesday.
The AK Party, which Erdogan founded, in June suffered its biggest election setback since coming to power in 2002, failing to win a single-party majority for the first time.
Erdogan could now hand the mandate to form the next government to the Republican People's Party (CHP), although he appears unlikely to do so, according to local media reports.
According the Hurriyet Daily News, Erdogan told academics at meeting on Wednesday he favored forming an interim "election cabinet" before new polls in autumn.
An interim, power-sharing government would likely be a fractious one and could further unravel investor confidence. Political uncertainty has already sent the lira currency down 20 percent this year and to a series of record lows over the last week.
Parliament could in theory also vote to allow the current cabinet to continue working until a new election, but at least one of the opposition parties, the nationalist MHP, has already said it would vote against such a move.
Erdogan, who won Turkey's first popular presidential election in August 2014 and has since stretched the powers of a largely ceremonial post to their limits, has said the system of power has changed in Turkey.
"There is now a president in the country not with symbolic power, but with literal power," he said recently.
Reporting by Daren Butler; Writing by Nick Tattersall and David Dolan; Editing by Andrew Roche