Addressing the press following the board's meeting on Friday, Centre chairman and outgoing Prime Minister Jüri Ratas said that it was differences of opinion when it came to tax matters that ended up being the red line.

Mr Ratas said that under such conditions, the Centre Party could not launch coalition talks with Reform.

He added that Frday morning's board meeting was one of the most complicated and serious meetings they had ever had.

Kadri Simson added that the conditions set by the Reform Party were too ultimatum-like.

"We received input that it would only be possible to enter talks [with them] only if the resulting government were to begin implementing the Reform Party's programme," she added.

According to Jaanus Karilaid, Reform's planned tax reform would not allow for Centre's planned extraordinary pension hike.

The ball is now back in Reform's court, Mr Ratas said. "From here on out, you will have to talk to the winner of the election," he added.

Kallas: Next steps to be discussed

Commenting on Centre's decision and announcement on Friday afternoon, Ms Kallas said that Centre's response and grounds for it were strange, as the latter ruled out seeking common ground with the former even before coalition talks could begin.

"I invited Jüri Ratas to coalition talks in the sincere belief that we had the opportunity to form a government," the Reform chairwoman said. "The fact that the primary campaign promise of the election-winning party is ruled out before negotiations begin demonstrates that the Centre Party doesn't acknowledge the results of the election. We will now discuss our next steps with the [Reform] party board."

Neither side backing down

The board of the Reform Party had decided on Wednesday to invite the Centre Party to launch coalition talks.

Reform chairwoman Kaja Kallas and Mr Ratas met on Wednesday evening at the Reform Party parliamentary group in the Riigikogu to discuss the possibility of launching talks.

Following their meeting, Ms Kallas said that Reform would not back down from its promise to extend the €500 basic income tax exemption to everyone.