Radical Left leader Alexis Tsipras has refused to join any coalition government that will not repeal the EU austerity plan
Greece risked the ire of the rest of Europe, and the all-powerful financial markets, when her politicians abandoned attempts to form a technocratic government last night and called fresh elections.
More than a week of talks between potential coalition partners came to naught, threatening several weeks of instability before the new parliamentary poll and, more crucially, fuelling doubts that Greece can ultimately maintain its position in the eurozone.
"For God's sake, let's move towards something better and not something worse.
"The country is headed to elections, under very dire conditions," said Evangelos Venizelos, the former finance minister and leader of the Socialist pro-bailout Pasok party.
"We are heading to elections because certain people put their party politics over the nation's interest."
Leaders of other parties also blamed petty political rivalries, opportunism and blackmail for the debacle.
"The bailout parties refused to accept our proposals. All they did for the past eight or so days was to present us with a dilemma: bailout package or elections," said Alexis Tsipras, the leader of the Coalition of the Radical Left parliamentary bloc, or Syriza, which surprised analysts when it came second in the initial poll on May 6.
The Syriza coalition is expected to win the next round of the elections, throwing into further doubt Greece's chances of staying in the single currency.
Mr Tsipras (37), who is also the president of the Synaspismos party, wants to rip up the punishing terms of the loan agreement that is helping Greece's economy to stay afloat.
The international response to the news was nervous as policymakers considered the consequences of Greece leaving the euro and defaulting on its debt. "The spillover effects, the chain of consequences that could result from [a Greek euro exit] are very difficult to assess," the head of the International Monetary Fund, Christine Lagarde, told France24 radio. "We can certainly assume it would be quite messy."
Echoes of the concern were heard across Europe, as the new French President, Francois Hollande, met the German Chancellor, Angela Merkel, in Berlin.
Ms Merkel's finance minister, Wolfgang Schauble, maintained Berlin's tough stance before the summit, insisting that Greece would not get any improved offer.
"The people in Greece must know that what we have agreed for Greece and have set in train is an entirely unusual effort," he said. He added that a new election, expected to be held in mid-June, would be a referendum on Greece's membership of the single currency.
The Greek President, Karolos Papoulias, and the divided party leaders are expected to meet again today to appoint a caretaker government to call the elections. The constitution stipulates that, as a last resort, a supreme court judge can be appointed to govern the country.
As the political stalemate emerged, the Athens stock exchange nosedived, closing 3.6% lower last night.