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ERBIL (Reuters) - Shi’ite militia leader Hadi al-Amiri, one of the most powerful figures in Iraq, withdrew his candidacy for prime minister on Tuesday, putting the country one step closer to forming a government after months of political stagnation.

Amiri heads the Fatih Alliance, an electoral bloc which came in second in May’s inconclusive national election. His coalition has been vying to build the largest bloc which would form the government, with him as prime minister.

“I would like to announce to the dear Iraqi people the withdrawal of my candidacy for prime minister, to open the way for serious dialogue to elect a prime minister and his government according to the vision of the Supreme religious authority,” he said in a news conference.

Amiri’s Fatih alliance was composed of political groups tied to Iran-backed Shi’ite militias who helped government forces dislodge Islamic State militants from the third of Iraq they seized four years ago. His Badr Organisation controls the interior ministry.

Amiri’s Alliance has been in advanced talks with Shi’ite cleric Moqtada al-Sadr to form a new alliance in recent days.

Sadr, whose Saeroon bloc scored a stunning victory in the May 12 parliamentary, portrays himself as a fierce nationalist opposed to both U.S. and Iranian interference in Iraq. He had formed an alliance with incumbent Prime Minister Haider al-Abadi since June, which looked set to falter.