Vienna - Austrian Social Democratic leader Werner Faymann is set to start formal talks with other parties over forming a coalition, after President Heinz Fischer tasked him with building a cabinet on Wednesday.

The Social Democratic Party (SPOe) won the recent parliamentary elections with 29 per cent of the votes and is seeking to continue in government with the centrist conservative People's Party (OeVP), which came in second at 26 per cent.

Faymann has few other options, since he has ruled out cooperating with the right-wing Freedom Party (FPOe).

In any case, both parties combined lack one seat in parliament in order to form a majority.

Conservative leader Josef Proell has said his party was still undecided whether to go into opposition for the next five-year legislative period. (dpa)