Outgoing prime minister Boiko Borisov turned down on Monday the mandate president Rosen Plevneliev handed him to form a second cabinet.
Borisov's centre-right cabinet resigned last week in the wake of street rallies across the country which started as a protest against high electricity bills but escalated into anti-government marches.
Under the Constitution, the president will now transfer the mandate to the Bulgarian Socialist Party which has the second largest parliamentary group and, if it declines, to the Movement for Rights and Freedoms. Both parties have said that they will decline to form a government.
If all three attempts to form a government fail, Plevneliev will appoint a caretaker cabinet, dissolve parliament and call general elections.
Snap elections could be held at the2 end of April or mid-May, Plevneliev said last week.