Catalan leaders were preparing Wednesday to declare independence after a violence-hit referendum, defying a warning from the country's king that national stability was in peril.
As the European Union urged dialogue to ease the standoff between separatists in the northeastern region and Madrid, a regional government source said the independence declaration could be as early as Monday.
The standoff has morphed into Spain's worst political crisis in decades, with images of Spanish police beating unarmed Catalans taking part in Sunday's banned independence vote sparking international concern.
But the region's leaders have pushed on with their bid to break away from Spain, angering Madrid and raising the risk of further unrest.
Spain's key IBEX 35 stock index plunged by more than three percent Wednesday in the ongoing turbulence, with some big Catalan banks down more than five percent.
"Political risk is back on the agenda in Europe," NFS Macro analyst Nick Stamenkovic told AFP.
After meetings in the regional parliament on Wednesday, pro-independence lawmakers called for a full session next Monday to debate the final results of the vote.
"According to how the session goes, independence could be declared," a regional government source told AFP, speaking on condition of anonymity.
Mireia Boya of the radical leftwing separatist CUP said it would be "a plenary to proclaim the republic" of independent Catalonia.
King Felipe VI earlier branded the independence drive illegal and undemocratic, throwing his weight behind the national government.
Catalan leaders "with their irresponsible conduct could put at risk the economic and social stability of Catalonia and all of Spain," he said.
But still Catalan President Carles Puigdemont has dug in.
He was scheduled to give a televised address at 1900 GMT on Wednesday.
A declaration of independence would intensify the conflict with the central government, which along with the national courts has branded the referendum illegal.
Madrid has the power to suspend the semi-autonomous status that Catalonia currently enjoys under Spain's system of regional governments.
That would further enrage Catalan protesters, who say they are being repressed by Spain.
King defends 'order'
The king's intervention could clear the way for Prime Minister Mariano Rajoy to act.
"It is the responsibility of the legitimate state powers to ensure constitutional order," Felipe said.
Hundreds of thousands of Catalans rallied in fury on Tuesday during a general strike over the police violence during the referendum.
Scores of people were injured on Sunday as police moved in en masse, beating voters and protesters as they lay on the ground and dragging some by the hair.
European Commission Vice President Frans Timmermans said Wednesday it was "time to talk, finding a way out of the impasse, working within the constitutional order of Spain."
Speaking in an emergency debate in the European Parliament, he defended Madrid's right to "the proportionate use of force" to keep the peace.
'Fuel to the fire'
In his speech, Felipe repeated earlier calls for harmony between Spaniards.
But Catalan government spokesman Jordi Turull said the king's speech "threw fuel on the fire."
Adding to tensions, the courts on Wednesday placed Catalonia's regional police chief Josep Lluis Trapero and three other suspects under investigation for an alleged "crime of sedition."
The force has been accused of failing to rein in pro-independence protesters during disturbances in Barcelona last month.
A rich industrial region of 7.5 million people with their own language and cultural traditions, Catalonia accounts for a fifth of Spain's economy.
Catalan claims for independence date back centuries but have surged during recent years of economic crisis.
The regional government said 42 percent of the electorate voted on Sunday, with 90 percent of those backing independence. But polls indicate Catalans are split.
The vote was held without regular electoral lists or observers.
A grouping of Catalans opposed to independence called for supporters to join a counter-demonstration in Barcelona on Sunday.
The call was backed by the regional branch of Spain's governing conservative Popular Party.