Portugal’s president Anibal Cavaco Silva appointed right wing incumbent Pedro Passos Coelho as prime minister of a new minority government on Friday of last week.
Silva rejected calls from Labour-type Socialist Party leader Antonio Costa to let him form a government supported by other left parties.
But Costa vowed to bring the new government down with a vote of no confidence.
Passos Coelho’s centre right coalition got more votes than any other party in the election on 4 October.
But it lost its parliamentary majority, with the Socialist Party, Communist Party and Left Bloc holding 122 out of 230 seats.
The relatively new Left Bloc was the election’s biggest winner.
It doubled its representation in parliament and overtook the Communist Party.
Its more radical positions have won support by appealing to social movements and anger against austerity.
But its leader Catarina Martins has agreed to support a Socialist Party led government.
Left Bloc insisted that wage and pension cuts must be reversed. But supporting the Socailist Party will involve voting for its austerity budget.
Martins argued that the lesson of Syriza’s failure in Greece was not to be “overconfident”.