Madrid responded angrily to Puigdemont's speech to Catalonia's parliament, saying his government could not act on the results of the referendum.
Prime Minister Mariano Rajoy will chair an emergency cabinet meeting a day after Catalan leader Carles Puigdemont signed a suspended declaration of independence and called for negotiations with Madrid.
Depending on the Catalan government's answer, the government in Madrid could impose direct rule on the region.
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.
Speaking in parliament, Rajoy says if Puigdemont confirms Catalonia has split from Spain, he will have a further five days, until October 19, to reconsider before Catalan autonomy is suspended.
On Wednesday, a government source who refused to be named said "all options" were on the table as crisis talks were under way.
"We call on global states and organisations to recognise the Catalan republic as an independent and sovereign state", he said.
Mr Rajoy said his government had asked the regional government to clarify whether or not it had declared independence. In all, 2.28 million Catalans, or 43% out of 5.3 million eligible voters, took part in the referendum.
There is just a whole lot of confusion in Spain's northeast region of Catalonia today.
But Spain's political establishment rounded on Puigdemont following his declaration, and support among separatists in Catalonia was mixed. "Indecision and uncertainty is the worst thing that can happen to us", she told AFP.
On Wednesday, Spain has officially announced their response regarding Catalonia's declaration of independence on Tuesday.
Spain's Deputy Prime Minister Soraya Saenz de Santamaria described Puigdemont as someone "who does not know where he is, where he's going".
"The answer from the Catalan president will determine future events, in the next few days", the prime minister pointed out.
It is unclear how Puidgemont's play for time will be received in Madrid, which has consistently said independence is not up for discussion.
But in discussing the controversy now raging over Catalonian independence, Press Secretary Sarah Sanders also made clear Tuesday that the administration stood by the president's remarks September 26 that "Spain is a great country and it should be united".
The Madrid stock market tumbles as rattled investors dump Spanish shares.
Demands for independence in Catalonia, one of Spain's 17 semi-autonomous regions which has its own language and cultural traditions, date back centuries.