The Greek left-wing leader Alexis Tsipras has said a deal has been brokered for a new government, but it will not involve his Syriza party.

Hopes have risen slightly that Greece can end its post-electoral deadlock without having to hold new elections, as international partners warned that Athens must stick to its austerity programme or abandon the euro.

Greek power-sharing talks entered a third and final round today, as parties in the crisis-hit country struggled to hammer out a coalition deal after general elections produced no outright winner.

Greece sank deeper into crisis yesterday when the leftist candidate for prime minister set conditions for a coalition which the biggest party said would destroy the country.

Greeks angered by a vicious and protracted financial crisis punished their two main parties in national elections Sunday, with exit polls projecting them both haemorrhaging support and no party gaining enough votes to form a government.

Greeks head to the polls on Sunday in their most critical – and uncertain - election in decades, with voters set to punish the two main parties that are being held responsible for the country’s dire economic straits.

Greece is to hold an early general election on May 6.

Greek Prime Minister Lucas Papademos says he has the backing of leaders from the three political parties supporting his interim government, as international creditors increase the pressure on Greece to make deeper spending cuts to secure new funding.

A DEAL on forming a Greek national unity government collapsed last night as the country headed towards an economic abyss, hours after outgoing prime minister George Papandreou said he was handing over to a coalition that does not exist.

GREEK Prime Minister George Papandreou agreed to step down as premier to allow the creation of a national unity government that will secure international financing for the country and avert a default.

ATHENS is likely to form a new government today following the U-turn by the prime minister when he reversed his shock decision to hold a referendum on his country’s bailout package.

GREEK protesters have vowed to surround parliament today to prevent deputies from debating new austerity measures, as unions said they would bring the country to a halt in a national strike.

Greece’s prime minister has said he will consider holding a referendum on further cutbacks essential for the loan-dependent country to continue drawing on funds from an international bailout, amid persistent anti-austerity protests.

Official results with just more than 40% of the total vote in the Greek election today counted showed Karamanlis' New Democracy party ahead with 43.7% and the opposition socialist PASOK party in second place with 38.5%.

EXIT POLLS last night indicated Greece's opposition conservatives had won yesterday's general elections, ending more than 10 years of rule by the socialist party.