Greek Prime Minister, George Papandreou negotiated a deal with his ministers led by the finance minister Evangelos Venizelos, where the deal included that Papandreou agreed to step down and hand powers to a coalition government in case he sees support with the confidence vote today, government sources with knowledge of a cabinet meeting said.

One source told Reuters the Prime Minister was told that he must leave calmly in order to save his party, and he agreed to step down. It was very civilized, with no acrimony.

The source said that the Prime Minister confirmed his mistake over calling for a general referendum on the second bailout deal.

The source also said that Venizelos told him he must make a graceful exit both for his sake and for the party's sake and that the ministers would help him do it, and added this is provided he survives the confidence vote, which is not at all certain.

Papandreou's office rejected to provide any comments on the discussions. Noting that the Prime Minister mentioned nothing in regards to his resignation as his office repeatedly denied this intention.

A minister present at the meeting said That was the agreement, and added that is now proving difficult because Samaras is setting all these conditions.

Both parties agree that the government would ratify the bailout agreement and then take the country to elections.