In a much-anticipated speech to the regional parliament, Carles Puigdemont, Catalonia's president, called for a temporary suspension of the results of Catalonia's October 1 referendum vote favoring independence, even while making clear his belief that the region is on the road to secession from Spain.
Catalonia is considering whether to break away from Spain following a chaotic, contested referendum on October 1 where about 90% of voters said they wanted independence.
"I propose suspending the effects of the declaration of independence to undertake talks to reach an agreed solution", Puigdemont told the regional parliament in Barcelona.
The Catalan government would like these talks to lead to an offer of a legal referendum, but few in the Spanish capital back such a prospect.
"More than two million two hundred thousand Catalans were able to vote because they overcame their fear, and because when they arrived at their polling station, they found ballot boxes, envelopes, voting slips, constituted voting tables and an operative and reliable electoral list", he said.
Puigdemont and his allies then signed a declaration of independence for the region, but suspended its implementation.
Following a prior referendum on Catalonia's independence in 2014-which delivered a pro-secession result but was not considered valid by Madrid-and the victory for a pro-independence coalition in the November 2016 Catalan elections, the Catalan government said it was preparing for the possibility of becoming a new country, pending the approval of the Catalan people.
The Spanish government through the Prime Minister Soraya Saenz Santamaria said that it would react to a declaration of independence.
Spain called an emergency Cabinet meeting for Wednesday, and Prime Minister Mariano Rajoy was scheduled to address the Spanish parliament afterward. "To these people who are scared, I am with you; I am with those people, I want to calm them".
The Spanish government had threatened tough action, possibly including imposing direct rule on Catalonia from Madrid, if he had gone ahead with breakaway moves.
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The crisis has caused deep uncertainty for businesses in one of the wealthiest regions in the eurozone's fourth-largest economy.
"We call on Puigdemont not to do anything irreversible, not to pursue a path of no return and not to make any unilateral independence declaration", government spokesman Inigo Mendez de Vigo told reporters earlier Thursday.
The issue has enormous emotional and political resonance in Spain, which spent years confronting a sometimes-bloody Basque separatist movement and views the Catalonia independence bid as something approaching an existential crisis.
"If do they do what the Catalans say they want, which is hold negotiations, they absolutely don't want to do that in government here because if they do it accepts the core of the Catalan argument, which is this is a political issue", he said.
Reaction among those who had hoped to witness a historic moment for a region deeply-divided over independence was mixed. "As a result of the referendum, Catalonia has won the right to be an independent state and for [Spain] to listen to us".
The stakes are high - losing Catalonia, which has its own language and culture, would deprive Spain of a fifth of its economic output and more than a quarter of exports. "With a Spanish state that continues to harass and persecute us?"
CUP leader Anna Gabriel said her party believed the Catalan parliament should have proclaimed a Catalan Republic on Tuesday.
Pensioner Marisol Rioja, 65, said: "We would have liked more".
Eric Martinez, a 27-year-old manager, also wept as he watched the speech with his girlfriend. "Mediation with Spain is useless", he said.