Qarase, elected on a nationalist mandate, has made it clear he does not want to work with Chaudhry whose policies he opposes.
The SDL said yesterday that it had secured the backing in principle of six minor party and independent MPs, which meant Qarase would command enough support in Parliament to be Prime Minister.
SDL spokesman Jale Baba said coalition details would probably be finalised today, and a cabinet agreed by midweek.
That support frees Qarase from having to deal with Speight, who was elected despite being in jail facing treason charges.
Speight's Conservative Alliance party has six MPs and wants all coup plotters freed as part of any coalition deal, a demand Qarase has rejected.
Instead it is Chaudhry who is pursuing the Conservative Alliance, because he needs them for a coalition.
Chaudhry said he did not see any credibility problems for Labour talking with Speight's party.
"They want to talk to us, they want to put the past behind, what's this reconciliation about if we are never going to forgive each other. I don't think the issue of credibility arises.
"The point is that they have six Members of Parliament, we have a constitution which is based on power-sharing.
"We are a multicultural society, multi-racial society, so we have got to talk to each other. It does not compromise our position."
He said Speight and the other coup plotters were in jail and would face trial so justice would be done.
Speight had been elected by the people, and Fiji had to live with it.
A spokesman at the Office of the President Josefa Iloilo said preparations were under way to swear in a new Prime Minister today, and a cabinet by Wednesday.
Under the constitution Qarase must offer Labour several positions in the new cabinet, but analysts here doubt Qarase and Chaudhry will be able to reach any agreement, leaving Labour in opposition.
Chaudhry said Labour intended lodging High Court challenges over the election results in six constituencies, claiming there were irregularities in voting procedures.
Commonwealth observers have already cleared the elections as credible.
- NZPA
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