Senior members of the outgoing government – a coalition of the VVD and Labour party – are holding a crisis meeting on Tuesday afternoon to head of the risk of a cabinet collapse.

The two parties have to finalise a budget for next year because the new cabinet has not yet taken office but are sharply divided over teachers pay.

Labour leader Lodewijk Asscher said earlier he would refuse to sign off on the spending plans unless there is more money for primary school teachers.

At first it appeared as if a deal had been reached, but yesterday it emerged that the VVD wants to leave the issue up to the next government.

Talks on forming a new administration are continuing but no agreement has yet been reached on the broader financial picture.

Sources told broadcaster RTL that the talks are extremely gloomy.

The 2018 spending plans, which will be presented to parliament on September 19, have to be finalised this week.