George Papandreou, the Greek prime minister, has offered to step down to facilitate the formation of a unity government to pass austerity measures, state TV reported.
His offer on Wednesday came hours after protesters angry over sweeping spending cuts clashed with riot police in the capital Athens.
Papandreou said the new unity government must support the EU and IMF bailout, and should not seek to overhaul it.
"Prime minister Papandreou talked with Antonis Samaras [head of the conservative opposition] today and proposed that if the two agreed on a framework of specific commitments for changes in the country and the political system and specific targets, he would be willing to stand down from his office," a government source told the Reuters news agency.
The opposition conservatives responded to the premier's offer by stating that a unity government was only possible if Papandreou resigned and if the bailout was renegotiated.