BBC reports that the Catalan leaders signed a declaration of independence on Tuesday.
If he says he did not declare independence, the far-left party CUP would likely withdraw their support to Puigdemont's government.
Puigdemont said on Tuesday that he had accepted "the mandate of the people for Cataloniato become an independent republic" following a banned referendum earlier this month.
The President of Catalonia, Carles Puigdemont, has said he will seek to acheive independence by way of negotiating with the Spanish government.
But in a parliamentary speech Puigdemont immediately called for independence to be suspended, to allow for negotiations with Madrid.
FRAYER: "I propose we suspend the effects of this declaration of independence", he said, "so that in the coming weeks, we may begin a dialogue".
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But the speech pleased financial markets, boosting the euro on hopes that his gesture would mark a de-escalation of Spain's worst political crisis since an attempted military coup in 1981.
Depending on the Catalan government's answer, the government in Madrid could impose direct rule on the region.
In his televised address after a top level government meeting, Rajoy said, "The cabinet has agreed this morning to formally request the Catalan government to confirm whether it has declared the independence of Catalonia, regardless of the deliberate confusion created over its implementation". And French President Emmanuel Macron rejected Puigdemont's call for European Union mediation, saying he was confident Madrid could handle the situation. It has its own language, parliament, flag and anthem.
One EU official said Puigdemont "seems to have listened to advice not to do something irreversible".
Nearly 90% of voters backed independence with a turnout of 43%, Catalan officials say. "My arrest would be unjustified and a mistake; this is not the moment to send people with whom you have political discrepancies to prison."Puigdemont said it was an important time for both sides to enter into dialogue."We are at a point where the most important thing that there is no previous condition to sit down and talk, to accept that we have to talk, we need to talk in the right conditions", he said".
Spain has been in turmoil since a disputed referendum on October 1 which was declared invalid by the country's Constitutional Court. Spain could still act against him, possibly invoking a clause of the constitution that cancels Puigdemont's regional powers.