Political leaders were scrambling unsuccessfully on Wednesday to find a new prime minister to lead Greece back from the brink of bankruptcy, after a plan to name a former central banker ran into trouble.

As negotiations entered their third day, a government spokesman said a new crisis coalition to push through approval of a euro zone bailout could be named by the afternoon.

But the haggling of the past few days suggested nothing was certain, despite growing impatience from the European Union and fears among ordinary Greeks that the deadlock could push their country towards an exit from the euro zone.

In the past two days, government sources have made a number of optimistic predictions about forming the government, which must secure a 130 billion euro (112 billion pounds) bailout before Greece runs out of cash, only for no deal to materialise.

Former ECB vice-president Lucas Papademos had been tipped as the leading candidate to lead the government of national unity, aiming to re-establish international credibility that the politicians lost long ago.

But sources in both parties said this was now in doubt and the two sides were looking at other options to resolve a crisis kicked off by Prime Minister George Papandreou's short-lived plan for a referendum on the bailout.

The Papademos candidacy has hit problems that have to do with both parties, one of the sources told Reuters on condition of anonymity.

Papandreou was due to meet the president later on Wednesday. Later on all the main political leaders were due to meet, deputy government spokesman Angelos Tolkas told NET radio.


Some Greek media reported that Papademos had set conditions that the parties would not accept, and others that there were objections from Finance Minister Evangelos Venizelos, because Papademos wanted to change the government's economic team.

Greek media mentioned parliamentary speaker Filippos Petsalnikos and socialist lawmaker Apostolos Kaklamanis as alternative premiers, but both denied that they had been picked.

The president of the European Court of Justice, Vassilios Skouris, was also being discussed, according to a source in the ruling socialist party.

The stakes could not be higher.

Greece must have a new coalition to secure the bailout, negotiate the release of emergency funds from the EU and IMF to avoid bankruptcy when big debt repayments come due next month, and safeguard its place in the euro zone.

For its part, the European Union needs to put out the fire in Greece to prove to international financial markets that it can tackle another blaze in Italy, a far bigger economy also in economic and political crisis.

In the latest sign of growing concern among EU leaders over the impasse in Athens, Papandreou's office said the premier had briefed French President Nicolas Sarkozy by phone on the negotiations for a new government.

Sarkozy gave his Greek counterpart a frosty reception at a summit in Cannes last week, and has openly said it is up to Greece to show it deserves to stay in the single currency bloc.

The pro-government daily Ethnos summed up the exasperation felt by Greeks with a banner headline: Find a solution!


Adding to the confusion, conservative leader Antonis Samaras became embroiled in a dispute within his New Democracy party and a related row with the European Union.

Party political sources said some New Democracy lawmakers were accusing Samaras of giving away too much, especially when he agreed to accept austerity measures in the bailout package.

Samaras had long argued that the spending cuts, tax rises and job losses imposed by the outgoing socialist government under orders from the EU and IMF had deepened Greece's crippling recession, now in its fourth year.

A New Democracy party source refused to accept the party was the main problem, but acknowledged internal divisions since Samaras staged his U-turn on the package last week, helping to open the way for Sunday's agreement in principle.

Parts of New Democracy are causing trouble. Many party officials around Samaras don't like the way things are going, the source said on condition of anonymity.

Under pressure from party dissidents, Samaras attacked the EU for demanding written undertakings from Greece that it would stand by its promises to implement the bailout package that euro zone leaders agreed last month.

European Economic and Monetary Affairs Commissioner Olli Rehn made the demand, exasperated by Greece's record of making promises on tackling its huge debt and budget deficit and then falling short of fulfilling them.

Rehn said Greece had breached confidence with the EU by calling the referendum. Now Brussels needed undertakings to release even the next 8-billion-euro instalment of funding for Greece under its original bailout package, pulled together last year, he said.

(Additional reporting by Daphne Papadopoulou; Writing by Deepa Babington; Editing by Kevin Liffey)