Libya's internationally recognized parliament, based in the eastern city of Tobruk, has voted down a UN-backed proposed national unity government, the assembly's media office said on Monday.
Some 61 of the 101 lawmakers present - the minimum required for a quorum - voted against the unity government, according to the office.
The assembly instead requested that the Presidency Council headed by Prime Minister Fayez Serraj come back with a smaller line-up, it said.
The vote is the latest setback to internationally backed efforts to bring about a unity government in the conflict-ridden North African country.
Serraj's Presidency Council has already won widespread international recognition despite its inability to form a full unity government. Forces aligned to it have been backed by US airstrikes in their campaign against Islamic State extremists in central Libya.
The parliament voted down a previous government line-up in January. At the time it also rejected a clause in the peace agreement that would hand control of the armed forces over to the Presidency Council.
Eastern Libyan military strongman General Khalifa Haftar is widely seen as being behind the resistance to the proposed unity government.
Analyst Mattia Toaldo said that Monday's vote could complicate progress towards the formation of the government if Serraj's Presidency Council declined to accept it. Questions had already been raised about the validity of the vote, he said.
But the vote could equally provide an opportunity for revisiting the government line-up to include more consensual figures, Toaldo, of the European Council on Foreign Relations, told dpa.
An agreement to that effect might come in a meeting of the politicians who first signed off on the UN-backed peace deal, expected to take place soon in neighbouring Tunisia, Toaldo said, adding that the vote should be seen in the context of that expected meeting.
The UN's mission to Libya said it could not comment until it was clear that the assembly had made an official decision.
"We are looking at reports but we don't see that there is an official decision [of the parliament] yet," Jean Alam, spokesman for the mission, said.
Libya has suffered from political and military chaos since the overthrow in 2011 of long-time ruler Moamer Gaddafi.
The conflict has turned the country into a nexus for people-smuggling to Europe and has enabled the Islamic State extremist organization to gain a foothold on the southern shore of the Mediterranean.
Forces aligned to Serraj's Presidency Council have advanced against Islamic State since May and have now hemmed the jihadists into two districts in central Sirte.
However, Western powers have expressed alarm at the potential for a new confrontation between forces aligned to Serraj and those loyal to Haftar around the key oil port of Zueitina in the central east.