Finland's centrist prime minister has raised the possibility of a government collapse after a coalition partner, the conservative party, failed to agree on reforms to the country's social and health care by a Thursday evening deadline.

Juha Sipila says talks between the three center-right ruling parties would continue through the night, but told reporters it was "very likely" he would meet the president in the morning to tender the Cabinet's resignation.

Sipila said late Thursday that if no agreement is reached it's unlikely he would call new elections but that talks could begin on forming a new coalition instead.

The three-party majority government, which includes the populist Finns Party, took office in May pledging to instigate major reforms and welfare cuts to revive the ailing economy.