Talks between three Greek parties on forming a new coalition government are set to resume on Wednesday, amid intense international pressure.
New Democracy, the conservative winner of Sunday’s election, is expected to lead the new government.
Pasok leader Evangelos Venizelos said a government could be formed by midday on Wednesday.
New Democracy leader Antonis Samaras’s three-day mandate to form a government expires on Wednesday.
It is unclear whether Pasok, which came third in the vote, will join the government, or merely support it.
The third party is Democratic Left. Between them, the three parties would have a majority of 29 seats in parliament.
They all favor keeping Greece in the euro while wanting to renegotiate 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 11.7 billion Euros ($14.8 billion) of cuts by 2014.
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.
World powers have urged Greece to move swiftly to form a government.
Speaking after talks between the three parties in parliament on Tuesday, Eavngelos Venizelos said a government “must be formed as soon as possible”.
He said his party would support the government “wholeheartedly”, but had not yet decided what form its participation would take.
If Antonis Samaras fails to form a government by the deadline on Wednesday, Syriza would be given 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 110 billion Euros ($138 billion) in 2010, then a follow-up last year worth 130 billion Euros ($164 billion), but they come with tough austerity measures attached.
Greece has also had 107 billion Euros ($135 billion) of debt, held by private investors, written off.
Bailout deal – Greek pledges
• Cut 15,000 state sector jobs this year – aiming for 150,000 to be cut by 2015
• Cut minimum wage by 22%, to about 600 Euros a month
• Pension cut worth 300 million Euros this year
• Spending cuts of more than 3 billion Euros this year
• Liberalize labor laws to make hiring and firing easier
• Boost tax collection
• Carry out privatizations worth 15 billion Euros by 2015
• Open up more professions to competition (health, tourism and real estate)
• Greece aims to cut its debt burden to 116% of GDP by 2020