President Rosen Plevneliev said he will call snap elections on May 12 if a third attempt to form an interim government fails next week.
In an address to parliament broadcast live by the Bulgarian National Radio on Thursday, Plevneliev said he will hand a mandate to form a government to the mainly ethnic Turks' party Movement for Rights and Freedoms (DPS) next week, and if they turn it down, he will appoint a caretaker government and call early elections.
DPS officials have already said the party will turn down the mandate.
Earlier this week the ruling party GERB rejected a mandate to form a second government after the cabinet of prime minister Boiko Borisov resigned last week. Two days later the second-biggest party in parliament, the opposition Bulgarian Socialist Party, also declined the mandate.
Borisov's cabinet resigned after a week of street rallies across the country which started as a protest against high electricity bills but escalated into anti-government marches.