Greece 'has a coalition government' - Pasok party leader
(40 minutes later)
The head of the small Greek Democratic Left party says he expects a deal later on Wednesday on a new coalition government, which he will support.
A deal has been struck to form a new Greek coalition government, the leader of the Greek Socialists (Pasok) says.
"We decided to give a vote of confidence to the government that will be formed," Fotis Kouvelis said.
"Greece has a government," Evangelos Venizelos said, following talks with the conservative election winner Antonis Samaras.
He was speaking after talks with the conservative election winner Antonis Samaras, Reuters news agency reports.
Details are expected to be finalised later on Wednesday, the BBC's Mark Lowen reports from Athens.
New Democracy, led by Mr Samaras, is expected to lead the coalition, which may also include the centre-left Pasok.
The small Democratic Left party is also expected to be in a ruling coalition with Pasok and New Democracy.
Mr Samaras's three-day mandate to form a government expires on Wednesday.
Democratic Left leader Fotis Kouvelis said "we decided to give a vote of confidence to the government that will be formed".
It is unclear whether Pasok, which came third in the vote, will join the government, or merely support it.
New Democracy, led by Mr Samaras, has until Thursday to form a government, otherwise the opposition leftist bloc Syriza gets a chance.
"We will have a government today," said a Pasok spokesman, quoted by the Associated Press.
Between them, the three parties would have a majority of 29 seats in parliament.
They all favour keeping Greece in the euro while wanting to renegotiate the terms of its EU-IMF bailouts, although they differ on the extent.
However, European leaders have indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another 11.7bn euros (£9.4bn; $14.8bn) of cuts by 2014.
Syriza stays out
New Democracy won 129 seats in Greece's 300-seat parliament on Sunday, followed by the radical anti-bailout party, Syriza, with 71, Pasok with 33 and the Democratic Left with 17.
The Pasok leader, Evangelos Venizelos, has said his party will support a government led by Mr Samaras, but Pasok has not yet decided what form its participation will take.
Failure to form a government by the deadline on Wednesday would give Syriza a chance, followed by Pasok.
But Syriza leader Alexis Tsipras has said he will not even attempt to do so. He has also refused to join a government led by New Democracy.
Two international bailouts have been awarded to Greece, an initial package worth 110bn euros (£89bn; $138bn) in 2010, then a follow-up this year worth 130bn euros, but they come with tough austerity conditions attached.
Greece has also had 107bn euros (£86bn; $135bn) of debt, held by private investors, written off.
