Spain’s ruling Socialist party will announce its plan to break the political deadlock “as soon as possible” after winning the country’s fourth general election in as many years but once again failing to secure a majority.

In the poll on Sunday, the far-right Vox party moved into third place as the conservative People’s party (PP) rallied and the centre-right Citizens party endured a humiliating collapse.

The Spanish Socialist Workers’ party (PSOE), led by the acting prime minister, Pedro Sánchez, won 120 seats, three fewer than in the inconclusive election in April.

The PP won 88 seats, followed by Vox, which more than doubled its seat count from 24 to 52.

The anti-austerity Unidas Podemos came fourth with 35 seats, followed by the pro-independence Catalan Republican Left with 13 seats. Citizens slumped to sixth place, as the 57 seats it picked up seven months ago dwindled to 10. The party’s leader, Albert Rivera, resigned on Monday.

Frustration and apathy appear to have affected turnout, with participation dropping from 75.5% in April to 69.9%.

The result suggests Spain is no closer to ending its impasse and is again bound for months of negotiations and horse-trading to try to assemble a government at a time of unprecedented political fragmentation.

On Monday morning the acting deputy prime minister, Carmen Calvo, said the PSOE was preparing to announce its proposals to break the deadlock. However, she said the PP and Citizens’ decision to work with Vox to take power in some Spanish regions over the past year had complicated matters.

“We’ll try to explore situation that will lead to a stable government,” she said. “The PP is in a complicated situation. It and Citizens are responsible for the level of support the far right has received. They haven’t shown themselves able to stand up to radicalisation. The PP will have a problem if it’s dragged along by Vox and becomes a constant obstacle in Spanish politics.”

Facebook Twitter Pinterest Santiago Abascal, the Vox leader, waves to supporters on Sunday after the election results were announced. Photograph: Andrea Comas/AP

Sánchez said in his victory speech that he intended to form a progressive government and he urged his rivals and opponents not to stand in his way.

“I’d like to make a call for the rest of the political parties to act generously and responsibly to unblock the political situation in Spain,” he said on Sunday night. “The PSOE will also act generously and responsibly to unblock it.”

The PP leader, Pablo Casado, said the ball was firmly in Sánchez’s court. “We’ll see what Pedro Sánchez suggests and then we’ll fulfil our responsibility, because Spain can’t carry on being deadlocked,” he said.

Vox’s leader, Santiago Abascal, told jubilant supporters his anti-immigrant party would not let them down. “We have led a cultural and political change, because we have opened up all the forbidden debates and told the left that the story isn’t over yet and that they don’t have any moral superiority,” he said.

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He was swiftly congratulated by far-right European politicians including France’s Marine Le Pen, Italy’s Matteo Salvini and the Netherlands’ Geert Wilders.

Pablo Iglesias, the leader of Unidas Podemos, who has offered to help Sánchez back into office, said the repeat election had served “to reinforce the right and to give us one of the most powerful extreme right in Europe”.

Rivera, once touted as the poster boy of centrist Spanish politics, had hinted on Sunday night that he might step down following his party’s pitiful results. “I want to be honest with the Spanish people,” he said. “There’s no excuse and no way to soften the bad result we had today.”

Iñigo Errejón, a former Podemos politician who now leads the new party Más País (More Country), which won three seats, said a progressive government was a “moral obligation”. “We can’t have a third election,” he said. “This repeat election is a warning about what happens when personal interests are put before national interests.”

The election on Sunday was triggered when the PSOE failed to find viable support for a new administration after its victory in April. The Socialists were unable to reach an agreement with Unidas Podemos, while Rivera flatly refused to do anything to facilitate Sánchez’s return to office.

The poll results came against a backdrop of renewed tensions between the central government and the separatist regional government of Catalonia, as well as growing concern over the economy.

Unemployment rose by almost 100,000 last month and the European commission has revised Spain’s growth forecast down from 2.3% to 1.9% for this year, and from 1.9% to 1.5% for 2020.

In the middle of October, Spain’s supreme court jailed nine Catalan separatist leaders for sedition over their roles in the failed push for independence two years ago. The verdict provoked violent unrest in Catalonia and prompted rightwing Spanish parties to call for a tough response from Sánchez, whom they routinely accuse of being too soft on the separatists.

The re-eruption of the Catalan crisis has helped fuel the rise of Vox, which favours a radical recentralisation of Spain.

The Catalan Republican Left hailed their showing on Sunday night as proof that the independence movement had responded to the sentence in “the only way it knows” – at the ballot box. It once again narrowly beat the Catalan socialists into second place in the region.

The far-left, pro-independence Catalan Popular Unity Candidacy party picked up its first two seats in the national parliament.