The president of Portugal named Luis Montenegro, head of the Democratic Alliance (AD), as the country's new prime minister on Thursday, inviting him to establish a minority government following eight years of Socialist governance.

The centre-right Democratic Alliance won a parliamentary election earlier this month but fell short of a working majority. 

Montenegro has consistently stated that his party is ready to govern independently and will not engage in formal negotiations with the far-right party Chega for a broad agreement to collaborate, Reuters reports.

Chega rose as a political force by quadrupling its representation in parliament, marking the first instance of such significant growth for a far-right party since the downfall of a fascist dictatorship 50 years ago.

The anticipated nomination by conservative President Marcelo Rebelo de Sousa occurred shortly after midnight on Thursday, following the tallying of remaining ballots from abroad by the electoral commission.

This resulted in Chega gaining two additional seats, while both the AD and the Socialists secured just one each.

Overall, the AD won 80 seats in the 230-seat legislature, which is anticipated to return next week, followed closely by the Socialists with 78 seats. Chega, a party established just five years ago, secured 50 seats.

"The AD won the election...(so) the president...decided to nominate Luis Montenegro as prime minister," the president's office said in a statement.

Following his appointment as prime minister, Montenegro informed reporters that the government would be sworn in on 2nd April. Within 10 days of this date, the government must present its programme to parliament, which is typically automatically approved unless parliament holds a vote to reject it.

Montenegro went on to add that he would present his cabinet of ministers to President Rebelo de Sousa next Thursday, the Reuters report states.

Analysts anticipate that an AD government will be permitted to assume power, with the 2025 budget serving as its initial trial of survival towards the year's end. Should the budget face rejection, it could potentially trigger a new election.