Turkey’s Prime Minister Ahmet Davutoglu on Tuesday informed President Recep Tayyip Erdogan he had failed to form a coalition government, paving the way for new general elections just months after June polls.

Turkey's Prime Minister Ahmet Davutoglu on Tuesday informed President Recep Tayyip Erdogan he had failed to form a coalition government, paving the way for new general elections just months after June polls.

In a major setback for Erdogan, the ruling Justice and Development Party (AKP) lost its overall majority in the June 7 legislative polls for the first time since it came to power in 2002, raising the prospect of the first coalition government in over a decade.

But in a meeting at the presidential palace in Ankara, Davutoglu returned to Erdogan the mandate he received from the president on July 9 to begin coalition talks with opposition parties, the presidency said in a statement.

"The prime minister told President Erdogan that despite all efforts he was unable to form a government that could win a vote of confidence," the statement said after the 90-minute meeting.

"President Erdogan thanked the prime minister for his efforts," it added.

With all possibilities exhausted before a August 23 deadline to form the new government, Turkey is now facing snap new polls and entering uncharted political territory.

Davutoglu had held coalition talks with the second-placed Republican People's Party (CHP) and third-placed Nationalist Movement Party (MHP) but failed to broker a deal with either.

According to the constitution, the AKP will be able to continue as a minority government until elections if a majority in parliament votes in favor of holding the early polls.

If however Erdogan uses his right to call the election himself, a so-called "election government" will be formed until the polls, consisting of members from all four parties represented in parliament.