MADRID (Reuters) - Spanish far-right party Vox is likely to gain power in the central Castile and Leon region in a coalition with centre-right People's Party after the local elections held on Sunday, a setback for left-wing Prime Minister Pedro Sanchez.

       "Vox has the right and the duty to form a government in Castile and Leon," Vox's national chief Santiago Abascal said at a political rally on Sunday evening after his party came third in a snap election.

       He added his party's local chief now looked likely to be the deputy regional president.

       Regional president Alonso Fernandez Manueco from the People's Party is likely to keep his job as his party gained a few percentage points of the vote, but didn't secure the absolute majority he sought.

       The move of Castile and Leon's electorate to the right is also a setback for the left-wing alliance ruling Spain, as Prime Minister Pedro Sanchez's Socialist Party and his far-left junior partner Unidas Podemos both lost votes in the elections.

       No national elections are scheduled before next year, though the rise of Vox is ominous for the national ruling coalition and the PP ahead of the regional elections in Andalusia, the country's most populous region.

       The PP rules Andalusia in coalition with centrist party Ciudadanos, which is rapidly collapsing and has lost almost all its representation in recent elections.

       The demise of Ciudadanos is leaving PP with no other potential partner than Vox.

       (Reporting by Inti Landauro; Editing by Toby Chopra)