Austria’s conservative leader has invited the far-right Freedom Party for talks to form the country’s next coalition government, opening the door for the controversial party to return to power after more than a decade in opposition.

Sebastian Kurz, whose Austrian People’s party (ÖVP) came top in elections on 15 October, said his party and the rightwing populists (FPÖ) were in favour of lowering taxes and shared “similar approaches” on the subject of immigration.

The 31-year-old, who is poised to become Europe’s youngest leader, warned that a coalition with the far right was only an option as long as Austria’s “pro-European direction” was retrained, citing the country’s upcoming presidency of the Council of the EU in the second half of 2018.

The coalition talks are expected to start on Wednesday.

Founded by former members of the Nazi party after the second world war, the FPÖ has previously formed governments with both the centre-left Social Democratic party of Austria (SPÖ) and the centre-right ÖVP.

The Freedom party came third in Austria’s national elections in spite of having lead in the polls for much of the year.

Speaking to journalists in Vienna on Tuesday morning, Kurz praised the FPÖ leader, Heinz-Christian Strache, for his “strong creative will and desire to change Austria”.

Strache later accepted the invitation to the coalition talks but warned that his delegation would “not make things easy for the ÖVP”. The FPÖ general secretary, Harald Vilimsky, emphasised that the FPÖ was not prepared to make a return to power conditional on giving up its membership of far-right Europe of Nations and Freedom (ENF) group in the European parliament.

Kurz had repeatedly criticised the FPÖ in the run-up the elections for its links to Eurosceptic parties such as France’s Front National or Italy’s Northern League.

Austria’s previous coalition government collapsed in May after months of deadlock over policy disputes between the SPÖ and ÖVP, which had jointly governed in a “grand coalition” for the last decade.

“The goal is clear, to form a stable government with a solid majority in parliament,” Kurz said on Tuesday. “If that’s not possible, a minority government is definitely an alternative.”