SOFIA, Aug 10 (Reuters) - Bulgaria"s largest political grouping gave up efforts to lead a minority government on Tuesday following a razor-thin victory in last month"s parliamentary election, increasing the prospect of new polls later this year. The anti-establishment There Is Such a People (ITN) party narrowly won the second 2021 election on July 11, bolstered by public anger against widespread corruption after over a decade of dominance by former centre-right premier Boyko Borissov. But with just 65 seats it needed the support of other smaller parties in the fractured chamber of 240 lawmakers, having declined cooperation with Borissov"s GERB or the ethnic Turkish MRF party. Yet it failed win the backing of its potential allies, two small anti-corruption parties, after refusing to sign a political agreement with them and proposing ministers which they saw as unfit to battle high-level graftin the European Union"s poorest member state. In a statement streamed live on Facebook, ITN leader Slavi Trifonov said he would not put his proposed minority government to a vote in parliament and accused the two parties of betrayal. "Without the support of the protest parties we will not propose a government," Trifonov said. "It is clear that the protest against GERB and all (that was) done by GERB has stayed in the past, while now in the parliament we see political ambitions, hypocrisy, lies, betrayals and games that are absolutely unacceptable for me." ITN"s failure to lead a government increases the prospect of new elections this year, creating a political vacuum that could hamper Bulgaria"s ability to tackle an expected new upsurge in COVID-19 or tap into the EU"s coronavirus Recovery Fund. "The present lack of clarity concerning a multi-year policy programme, for which a permanent government is crucial ... makes the economy more vulnerable amid the health crisis," said Dennis Shen, an analyst with Scope rating agency. "The uncertainty might, in addition, affect the timetable for euro-area accession," he said. Under the constitution, there will be two more attempts to form a government by other parties, but analysts say their chances of success look limited. On Tuesday, Trifonov said ITN would not back any new attempt to form a government within the current parliament, despite calls from smaller parties to agree on a cabinet with a limited lifeline of six to eight months to avoid a political crisis.