Last month the recognised parliament rejected a 32-member unity government announced as part of a UN-brokered deal, saying it was too large and setting a 10-day deadline for a smaller cabinet.
On Monday, prime minister-designate Fayez al-Sarraj said a UN-backed Presidential Council tasked with forming the unity government needed an extra week to reach agreement on a new cabinet list.
The recognised parliament, which is based in the eastern city of Tobruk, announced Wednesday on its website that it had voted to give the council "until Sunday to form a unity government".
The council is made up of nine members from Libya's rival factions and headed by Sarraj, a businessman, have been meeting in Morocco to try and come up with a government, according to UN envoy Martin Kobler.
"Never seen the presidential council so committed in day/night [meetings] to present a good list of the new unity [government]," he tweeted on Wednesday.
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