Isamaa's refusal to back down is hampering any further progress, Kallas added, noting alternatives would be a minority coalition with the Social Democrats (SDE) or the even less desirable scenario of continuing as a single-party, minority government – which would be so hampered by its Riigikogu representation that a topsy-turvey situation where government-by-opposition might emerge in September, followed by either her resignation or a vote of no-confidence, or even extraordinary elections.

Kallas said Thursday, at the regular government press conference but following an exhausting overnight session that the Reform delegation had: "Made an effort, but unfortunately no agreement has been reached yet."

"There was already such a feeling of powerlessness last night," she added.

"While there have been several hopeless moments during the coalition talks: "Then the light comes at the end of the tunnel again, only for things to start to disintegrate [againg]," Kallas went on.

Now, "when you get the feeling that this will still isn't there", at some point Reform must also decide whether to continue alone as a minority government, a position it has occupied for over a month now, or in coalition with the Social Democrats (SDE), which would still be a minority coalition with 44 seats at the 51-seat Riigikogu.

So far as Isamaa goes, the end of the line appears to have been reached, Kallas added.

She said: "We have already made so many compromises that it is not possible for us to move [in reverse] any more. /---/ The goal cannot be an agreement that one side gets the most and the others are forced to compromise. /---/ My impression is although we have done everything to reach an agreement, now a month has passed and still new issues are cropping up."

Kallas also noted that the potential coalition under discussion was temporary only – referring to the fact that the general election comes round in March 2023 – and: "Will not solve the entire world's problems."

There may be a glimmer of hope with Isamaa, she added. "Maybe once everyone has had a wink of sleep, thought things through and talked with their own side, the picture will become clearer, as to whether we want to form a government and be a part of it."

Reform's first option would still be to continue talks with the aim of constructing a coalition, but if no indication of that happening emerges, that has to be admitted.

A Reform-SDE minority coalition at least might be able to raise the income tax-free allowance to a threshold equal to the minimum wage and introduce Estonian-only education from kindergarten level.

This would be preferable to continuing the sole party coalition, which Kallas considers unrealistic given once the Riigikogu re-convenes in mid-September, not only would Reform, with its 34 seats, not be able to pass its own legislation easily but the opposition would also be able to vote through obligations to which the government had not committed.

Reform's seven ministers have also had to double up and act as caretaker ministers for the seven portfolios vacated when Kallas dismissed the Center Party component of the administration, on June 3.

At that point, Kallas would, she said, either have to resign or face a vote of no-confidence.

Should no new government be put together at that point, a snap election – a first for Estonia - six months ahead of the scheduled general election, would have to be called.

While SDE deputy leader Riina Sikkut had been more optimistic of reaching a deal "even in an hour" after the overnight session, she did not mention whether that would be between all three parties or just Reform and SDE.

Meanwhile, Isamaa's leader, Helir-Valdor Seeder, said Thursday morning that some common ground had been found on the three key issues at stake - energy prices, family benefits and Estonian-language education - though nothing approaching an agreement.

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