Portugal's main opposition Socialists reiterated their rejection of the centre-right government's austerity policies on Wednesday (April 17) despite attempts by Lisbon's EU and IMF lenders to rebuild a political consensus around their bailout.

"The Socialist party will not back measures that dismantle the welfare state," Socialist leader Antonio Jose Seguro told reporters, referring to planned spending cuts in healthcare, education and social security. "Our position is to show to the troika that the policy applied here does not lead to the desired results and also provokes a spiral of recession."

He was speaking after meeting representatives of Portugal's lenders from the European Union and IMF who are in Lisbon this week to work with the government on new spending cuts needed to meet bailout goals after the constitutional court rejected some austerity measures from this year's budget.

The coalition government has a comfortable majority in parliament to pass bills, but the lenders want broader political support for austerity to make the reforms sustainable.

The cabinet was in a meeting on Wednesday to discuss the cuts. The next 2 billion euro tranche of Portugal's bailout hinges on the approval of the new cuts by the lenders.

The Socialists, whose previous government agreed Portugal's original bailout deal in 2011, have changed their stance towards further austerity in the past few months after the government applied the largest tax hikes in living memory.

Presented by Adam Justice