Catalonia’s leader Carles Puigdemont is facing a final deadline to drop a secession bid, with Spain warning it will suspend the region’s autonomy if he fails to do so by 10:00 (08:00 GMT).
After a referendum on 1 October, he signed an independence declaration but then suspended it, asking for dialogue.
Reports suggest he will press ahead on independence if Madrid moves to take direct control.
There are fears that this may lead to civil unrest in Catalonia.
Article 155 of Spain’s 1978 constitution allows Madrid to impose direct rule in a crisis but it has never been invoked in democratic Spain.
In the lead-up to the deadline, there have been mass protests over the detentionof two leaders of the separatist movement.
Political leaders in Madrid and Barcelona have been engaged in a tense stand-off since the disputed referendum, which Catalan leaders say resulted in a “Yes” vote for independence but which the central government regards as illegal.
Spanish Prime Minister Rajoy set the deadline for Mr Puigdemont to offer a definitive answer on the independence question, and has called on him to “act sensibly”.
“It’s not that difficult to reply to the question: Has Catalonia declared independence? Because if it has, the government is obliged to act in one way, and if it has not, we can talk here,” he said in parliament on Wednesday.
This is a second and final deadline, as Madrid says Mr Puigdemont on Monday failed to clarify whether he had declared independence.
If Mr Rajoy decides that his government should intervene, he is expected to call a special cabinet meeting to discuss what specific measures should be taken.
Mr Rajoy is due to attend an EU summit in Brussels on Thursday afternoon. It is possible a cabinet meeting could be called before he goes or postponed until Friday.
It would be Spain’s Senate, controlled by Mr Rajoy’s conservative Popular Party (PP) and its allies, that would launch the transfer of powers from Catalonia to Madrid under Article 155 of the constitution.
It is thought the measures taken could range from taking control of the regional police and finances to calling a snap election. The timetable for this process is imprecise. (Courtesy BBC)