Spain's acting Prime Minister Mariano Rajoy is holding talks with the leader of the small, business-friendly Ciudadanos party who now says he will negotiate on supporting Rajoy's bid to form a government.

Rajoy meets Albert Rivera on Wednesday as part of his efforts to muster support for a parliamentary vote to allow him to form a government and end an eight-month political deadlock following two inconclusive elections.

Rivera had previously said his party would abstain, but on Tuesday he suggested this could change if Rajoy agrees to a six-point reform package, which includes an electoral law reform and anti-corruption and transparency measures.

Rajoy's conservative Popular Party, in power since 2011, would still need further outside support or abstentions to win any vote.