The party of Spain's acting prime minister is meeting to decide if it accepts conditions that a small party has made in return for supporting his bid to end the eight-month political deadlock and form a new government.

The Popular Party is expected to endorse in principle the six conditions set by the business-friendly Ciudadanos at Wednesday's meeting and give acting Premier Mariano Rajoy the go-ahead to negotiate a pact.

But even with Ciudadanos' backing, Rajoy will still need support or abstention of other parties in a parliamentary confidence vote, and that appears unlikely.

Rajoy's party, in power since 2011, has been running a caretaker government since December after two elections produced hung parliaments.

The party won the most seats in both elections but lost the absolute majority it held.