Published: Thursday, 3 Nov 2011 | 8:44 AM ET
Greek Prime Minister George Papandreou is to resign in the next thirty minutes, according to a report on the BBC which quoted sources close to the government.
Papandreou will meet Greek President Karolos Papoulias immediately after an emergency cabinet meeting has finished.
He is expected to offer to resign and offer a coalition government in place of the current administration, with former Greek central banker Lucas Papademos at the helm.
Earlier on Thursday, Antonis Samaras, leader of the opposition New Democracy, called for a new coalition government to be formed, before snap elections, on Greek television Thursday.
Samaras said that Greece will stay as a member of the euro zone and that the country's politicians need to make sure that the government will receive the next tranche of its bailout loan from the troika consisting of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EC).
Papandreou's PASOK party was thrown into disarray on Thursday morning after a series of defections left it without a majority in the Greek Parliament.
After a number of PASOK MPs declared that they would not support the referendum on the latest bailout deal for Greece, Papandreou was left with the support of just 149 MPs in a parliament of 300.
Papandreou is expected to make a statement after an emergency cabinet meeting Thursday. He will visit the President of Greece, Karolos Papoulias, after the meeting is finished, according to the Greek state television channel.
"It is critical that the country's political forces agree to the creation of a national salvation government," PASOK politician Dimitris Lintzeris told reporters Thursday morning. "Papandreou is past."
Vasso Papandreou (no relation to the Prime Minister), also from PASOK, repeated her call for a national unity government to make sure that last month's bailout deal is enacted.
"The prime minister has not resigned and does not intend to resign," his chief of staff Regina Vartzeli told the website of Proto Thema newspaper Thursday.
Finance minister Evangelos Venizelos issued a statement expressing concerns about the planned referendum Thursday morning. The referendum is scheduled for December 4.
The Greek parliament is due to hold a vote of confidence in the government Friday morning.
If it is defeated, the government may have to face a new election, which could cause even more turmoil in the debt-laden state.
However, a defeat should mean that Greece is more likely to receive its next tranche of aid.
IMF Managing Director Christine Lagarde, French President Nicolas Sarkozy and German Chancellor Angela Merkel warned Papandreou Wednesday that Greece will not receive any more aid until the referendum issue is resolved.
Opposition party New Democracy will probably win an election if one is called soon, according to analysts at Citi.
"The ND has opposed each and every bill related to the bailouts so far," the analysts wrote in a note Thursday. They also pointed out that the party said it wants to reopen bailout agreements.