ByREUTERS
Hezbollah said on Wednesday a new cabinet was needed to pull Lebanon out of financial crisis, after a standoff over government formation between its president Michel Aoun and prime minister-designate Saad al-Hariri worsened.

The crisis is posing the biggest threat to Lebanon's stability since the 1975-1990 civil war, and a new cabinet could help initiate reforms to unlock foreign aid.

"Government formation is the only alternative to the chaos that threatens everyone," Hezbollah's parliamentary bloc said in a statement, calling for transparency and cooperation between Lebanon's leaders.

The row between Hariri and Aoun intensified after a meeting between the two to discuss a new cabinet ended in a public repudiation.

Lebanon's Iran-backed Hezbollah group is an ally of Aoun.

Its chief Hassan Nasrallah has said he would support a cabinet of specialists should Hariri and Aoun come to an agreement.

Monday's failure to form a new cabinet had prompted calls to reactivate the government of Hassan Diab, which has served in a caretaker capacity since resigning in August in the aftermath of the Beirut port blast.

Diab said on Wednesday it was up to parliament whether to re-activate a resigned cabinet.