The Spanish government is scrambling to resolve a dispute over income tax for minimum wage earners.

The conflict arose after a recent increase in the minimum wage to €1,184 led to some workers being required to pay income tax for the first time.

Vice President Yolanda Díaz and Finance Minister María Jesús Montero are negotiating a solution to compensate the affected 20% of workers.

Díaz insists that minimum wage earners should be exempt from taxation, while Montero argues for a progressive tax system.

Talks are ongoing, with both sides aiming to avoid a political clash before Friday's deadline.

A potential compromise could involve targeted tax deductions for those impacted.