Greece is set to go to the polls again after days of coalition talks failed to produce agreement on a new government, says the leader of the Socialist Pasok party, Evangelos Venizelos.
A final round of talks on Tuesday morning broke up without a deal.
In elections on 6 May, a majority of Greek voters backed parties opposed to austerity plans demanded by the EU and IMF in return for two bailouts.
A caretaker government will be appointed on Wednesday, reports say.
"Unfortunately, the country is heading again toward elections," Mr Venizelos told reporters after the talks on Tuesday.
European leaders say that they will cut off funding for Greece if it rejects the bailout agreed in March.
This would mean effective bankruptcy for Greece and its all but certain exit from the European single currency, analysts say.
Polls suggest the leftist Syriza bloc, which came second in the 6 May vote and rejects all further cutbacks, could become the largest party after a new election.
Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.
Speaking after the talks, the leader of the Independent Greeks Party, Panos Kammenos, said: "The pro-bailout parties would prefer a government which will further torment the Greek nation, rather than finding a solution. They have offered a proposal that is too rigid for me to accept".
-BBC
