George Papandreou, Greece’s prime minister, began talks on forming a cross-party government to implement a tough new austerity package, amid signs international lenders will release €12bn ($17bn) in aid next week despite their failure to reach a new bail-out agreement.
Mr Papandreou discussed forming a coalition with Antonis Samaras, leader of the main conservative opposition party but no deal was reached, according to people with knowledge of the talks. It was not clear whether he was prepared to make way for a neutral figure to take over as premier, the same people said.
Lucas Papademos, a former central bank governor who retired last year as deputy president of the European Central Bank, has been mentioned as a possible candidate for the job.