The government spokesman announced on Sunday morning, speaking on a current affairs TV programme, that an agreement over a coalition or unity government could be worked out the same day, while adding that the name of a new prime minister could also be announced.

Spokesman Ilias Mossialos underlined that negotiations are underway, clarifying that the name of the new premier must be announced by tomorrow. However, he cautioned that current Prime Minister George Papandreou would resign only when the two issues are finalised.

Moreover,he said a council of political party leaders would be convened in the wake of such an agreement, adding that all procedures would be finalised in the coming week in order for a vote of confidence to be taken in Parliament.

In response to raging domestic and international media attention, Mossialos said it was "necessary" for both major parties (ruling PASOK and main opposition New Democracy) to participate in such a government, without however, the presence of lesser Parliament-represented parties ruled out.

Queried over details, the spokesman also said that such a government would be short-lived, and could accommodate both politicians and technocrats.

In light of the whirlwind political developments in Greece - and unprecedented international media scrutiny - a Cabinet meeting chaired by Papandreou will convene at 4 p.m. (14.00 GMT) instead of 6 p.m., although government and PASOK party meetings often begin with delay.

Officially, a briefing on the Oct. 26 Eurozone decisions, i.e. the Greek debt 'haircut' and an accompanying new lending agreement, along with the still delayed 6th tranche of the first bailout package, will be discussed.

On the other side of the "political fence", main opposition New Democracy party cadres have been quoted as saying the party will agree to such a prospect as long as a transitional government lasts no longer than six weeks, time enough to ratify and implement a series of landmark recent agreements Athens has signed with its creditors.

Former minister and top cadre Andreas Lykourentzos, amongst others, said the President of the Republic, whom ND leader Antonis Samaras will meet on Sunday, has the responsibility for determining the tenure of such a government.

The European Union's Economic and Monetary Affairs Commissioner increased the pressure on Athens to agree to a coalition government: «We have called for a national unity government and remain persuaded that it is the convincing way of restoring confidence and meeting the commitments,» Rehn told Reuters.

He said Greece's European peers «faced last week a breach of confidence by Greece which meant that Greece took itself on a course that would lead it outside the eurozone. We do not want that but we must be prepared for every scenario, including that one, for the sake of safeguarding financial stability and saving the euro.»

Samaras: If the PM resigns, I am determined to help

Opposition leader Antonis Samaras promised on Sunday afternoon to help build a coalition government once Prime Minister George Papandreou resigns, asking him to do that immediately.

On his way out of the Presidential Mansion following his 15-minute meeting with President Karolos Papoulias, Samaras departed from his strict position of sticking to his proposal for a government without any politicians, saying that the road is open for a solution if Papandreou goes.

“The Prime Minister must decide what he wants to do as by not resigning he hampers any solution, said Samaras.

“As long as he is not resigning, he is blocking what the Constitution provides for. If he resigns, everything will take its way. I am determined to help to find a solution.”

In the first seconds of his meeting with Papoulias, Samaras said “I realize the agony of the people. We must all take out responsibilities and send a message of stability and trust abroad and a message of stability and normality domestically.

Papoulias agreed that a stability message must be sent domestically and abroad, as “Greek people are being tortured. Uncertainty needs to end.”

Later in the day the Prime Minister will chair en emergency cabinet meeting, which will be closely watched.

Reports suggest that the resignation of the Prime Minister will trigger in-depth talks between the two main parties for a joint government with all issues on the table, given the pressure of the people and from the country’s creditors.

PM asks for meeting with Papoulias, Samaras

Prime Minister George Papandreou reportedly told his ministers during an extraordinary cabinet meeting on Sunday afternoon that he had asked President Karolos Papoulias to host a meeting between himself and opposition leader Antonis Samaras, during which the premier will announce his resignation.

Skai radio reported early on Sunday evening that Papandreou saw this as the only way for him to resign in a way that Samaras would accept so as to offer his consent.

"I have asked the President to invite me and Samaras, and this may take place immediately after this meeting,» Skai reported, adding that once an agreement is made, Papandreou will no longer be prime minister.

Trilateral meeting on new government ends

Greek state television says a critical meeting has ended involving the country's president, prime minister and the head of the main opposition party to find common ground on forming an interim government and end a severe political crisis.

The crisis in Athens has threatened the country's ability to avoid a catastrophic bankruptcy and retain its cherished eurozone membership.

Prime Minister George Papandreou has said he will step aside once an agreement is reached on an interim government whose main task will be to pass a new European debt deal. Opposition leader Antonis Samaras had insisted Papandreou resign before negotiations began.

President Karolos Papoulias hosted Sunday night's meeting, which state NET TV said ended after about 1 1/2 hours. There was no immediate word on the outcome.