Talks between Portugal’s prime minister and his coalition partner were said yesterday to be progressing to defuse a political crisis that has jolted Lisbon’s hope of a smooth exit from its international bailout.

Portugal’s president summoned the main political parties for crisis talks over the government’s future, with markets reeling on fears that a snap election could derail Lisbon’s exit from an international bailout.

Portugal’s foreign minister Paulo Portas resigned, the president’s office said yesterday, in a further blow to the centre-right coalition that has kept the country’s international bailout on track.