Papandreou met opposition leader Antonis Samaras and agreed to form a government that would lead the country “to elections immediately after the implementation of European Council decisions on October 26”.

Papandreou has already confirmed that he will not be leading the new government.

Samaras had previously demanded elections and refused to work with Papandreou’s socialist Pasok party, but has now said that he is “determined to help” reach an agreement providing that Papandreou stepped down first.

Hong Kong-based currency strategist at Scotia Capital, Sacha Tihanyi, said: “If we take it to mean that Greece is making efforts to ensure that they continue to receive funding support from the euro zone, then the move is positive.

“However, it would be much better to see sustained political stability out of the country.”

Both sides will meet today to decide on a new leader, mandate and time frame for the government.

The finance ministry released a statement yesterday saying that February 19 is the “most appropriate” date for elections.