New Greek government set to be unveiled today

A new Greek interim government will be announced this afternoon, a government official said, after critical power-sharing talks between the country’s two parties dragged into a third day.

Negotiations between prime minister George Papandreou and opposition leader Antonis Samaras began on Monday in an effort to resolve a political crisis that has threatened to leave Greece without its vital bailout loans and raised the possibility of the country leaving the euro.

The two reached a historic weekend agreement to forge an interim government that will shepherd the country’s new €130bn European rescue package through parliament and end an intense political crisis that threatened Greece’s solvency and membership of the euro.

Mr Papandreou has agreed to step aside once a deal is reached. His surprise announcement last week that he would put the new debt deal to a referendum sparked the latest political crisis, leading to an angry backlash from European leaders who had hammered out the agreement barely a week before, and a revolt from his own Socialist MPs.

He withdrew the plan after Mr Samaras indicated he would back the debt deal.

As coalition talks spilled into a third day without any public announcement of who will take over as interim premier, a government official said Mr Papandreou would visit President Karolos Papoulias by around midday.

The official said the make-up of the new cabinet would be announced in the afternoon after a meeting between party leaders. According to protocol, government changes must be announced to the president, who holds a largely ceremonial post.

By Tuesday night, officials on both the governing Socialists’ side and the opposition conservatives said the most likely candidate to replace Mr Papandreou was former European Central Bank vice president Lucas Papademos.