Tunisia's prime minister-designate Elyes Fakhfakh has announced the formation of a new coalition government after coming to an agreement with Ennahda, the biggest party in parliament, in a deal that will potentially end a months-long political crisis.

With this latest agreement, the proposed government will likely win a confidence vote in parliament in coming days, likely avoiding an early election.

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Fakhfakh proposed the line-up of a new government on Saturday and then said negotiations would continue after the Islamist Ennahda party sought some changes.

With 53 seats in the 217-member parliament, Ennahda said it would only join a unity government that brings together parties from across Tunisia's political spectrum.

President Kais Saied said on Monday he would dissolve parliament and call for an early election if the new government failed to win a parliamentary confidence vote.

The proposed government must be approved by the deeply fragmented parliament in coming days.

Among the other proposed ministers in his cabinet are Mongi Marzouk as energy minister, Mohamed Ali Toumi as tourism minister and Thouraya Jribi as justice minister.

Qalb Tounes or Heart of Tunisia, the second-biggest party with 38 seats, also said it would not back the government after the prime minister-designate excluded it from the coalition.

Fakhfakh had promised to name a government that would draw only from parties he considered aligned with the goals of Tunisia's 2011 revolution and committed to rooting out corruption.

The cabinet proposed includes Ennahda, Tahya Tounes, Achaab , Attayar, El Badil parties and independents.

Tunisia faces a series of long-term economic challenges which threaten to undermine public trust in the young democracy, and which demand political decisions that could be unpopular.

Tunisian officials said the IMF was waiting for the new government to start talks over a sixth review of its IMF loan programme. Tunisia needs to borrow about $3bn internationally in 2020 to meet spending commitments.

Since the 2011 revolution, unemployment has been high and growth low, while the government has sunk further into debt with a series of big budget deficits that foreign lenders demand it bring under control.

Elections in September and October returned Saied, a political independent, as president, and a parliament in which Ennahda held fewer than a quarter of the seats.