In an effort to break the political deadlock, Greek President Karolos Papoulias hosted late, closed-door talks between Prime Minister George Papandreou and opposition leader Antonis Samaras.

Throngs of reporters outside the gates of the presidential palace in Athens were on hand when word came a few hours later.

Reporters from Greek national media read the statement from the president's office.

The statement said Mr. Papandreou and New Democracy party leader Antonis Samaras had reached a preliminary agreement to form an interim government, and that Mr. Papandreou will not lead the new government.

The statement added that the two men are expected to meet again on November 7 to discuss details of the plan, including who will lead the government to early elections.

Mr. Papandreou agreed to step aside as long as Athens could secure a loan that would help Greece avoid bankruptcy. The nation's finance minister has said Greece needs US$11 billion in bailout funds in the coming weeks to stay afloat.