Lebanon’s head of state has named a new prime minister in an effort to break a political deadlock that has paralysed the country and left it unable to deal with a dire financial crisis that threatens to sink its economy within weeks.

However, the designation of Hassan Diab, a former minister and university professor, failed to spark enthusiasm, exposing yet again the depths of divisions across the fractured political spectrum and among a public that has little faith in the stewardship of its leaders.

Diab was backed by the powerful militia-cum-political bloc Hezbollah and its main Christian ally. But other members of Lebanon’s fractured parliament fell in behind former ambassador to the UN and judge Nawaf Salam – a rare unaligned figure seen as a credible alternative to a political class that has been broadly rejected over nearly six weeks of nationwide protests.

If Diab’s designation is confirmed during a second round of consultations on Saturday, he will need to assemble a cabinet, the form of which is one of many disagreements fuelling the crisis.

Protest against prime minister designate Hassan Diab in Beirut on Thursday. Photograph: Anadolu Agency/Getty Images

Many more weeks of horse-trading are likely to follow and Diab will probably come under pressure from his backers to disavow a ministerial line-up comprised solely of technocrats – a key demand of many protesters.

Diab was perceived by some politicians to have moved closer to Hezbollah during his time as education minister. His allegiance could well prove crucial to whether or not aid money is sent to Lebanon, including a French package of $11bn, which has been conditional on reforms that are yet to be made.

With significant capital flight and little if any money flowing to Lebanon in more than a month, the banking system is on the edge of a precipice. Standard and Poor’s downgraded three local banks to a “selective default” rating on Thursday and the central bank has started printing money – raising fears of an inflationary spiral in addition to plunge in the Lebanese lira, which has lost 30% of its value since mid-October.