Greek radical left leader Alexis Tsipras says he will not join or support a pro-bailout coalition government, saying he cannot agree to what he terms a mistake.
His continued refusal makes new elections in the crisis-struck country more likely.
Mr Tsipras made the comments today after attending a meeting convened by President Karolos Papoulias with the head of the conservative New Democracy and socialist PASOK parties.
Greek socialist leader Evangelos Venizelos has handed back the mandate to seek partners for a coalition government after three rounds of negotiations proved fruitless.
There is only one chance left for an agreement, when the president convenes all the party leaders for a last attempt at a deal.
Greek President Karolos Papoulias will today try to persuade political leaders to form a government and avert a new election amid mounting concern the country may leave the euro area.
Yesterday Alexis Tsipras, the leader of the biggest anti-bailout party, Syriza, turned down an appeal to join a unity government.
If these attempts to form a coalition fail a new general elections would most likely become the only next step.
Greece is deeply divided over austerity measures demanded in return for an EU/IMF bailout
European Council President Herman Van Rompuy has appealed to the country's leaders to resolve their political stalemate.
– European Council President Herman Van Rompuy
"I appeal to the sense of national responsibility of all (Greek) political leaders to reach an agreement respecting the country's engagement and ensuring its European future."
The leader of Greece's socialist party, Evangelos Venizelos, has acknowledged his failure to form a government after he was spurned by radical leftist Alexis Tsipras.
Tsipras, who saw it as a scheme to salvage the bailout said: "It is not the Left Coalition that has refused this proposal, but the Greek people, who did so with their vote on Sunday."
After the meeting, Venizelos said: "The moment of truth is here. I will inform the president tomorrow afternoon. I hope everybody shows maturity and responsibility in consultations with the president."
President Karolos Papoulias will now have a last chance to meet with all political leaders to convince them to agree a cabinet.
If he fails as expected, he must call a new election for mid-June.
Greece's politicians have yet again failed to agree a new government, after the latest round of coalition talks.
It means that the prospect of fresh new election looks ever more likely.
The situation in the troubled country has caused havoc in financial markets.
The European single currency hit its lowest point since January, while the Athens stock exchange fell more than 4 percent to its lowest level since 1992.
The deadline is scheduled to pass for the left wing Syriza party to form a government in Greece.
The centre-right New Democracy party topped the 6th May poll with 18.9% of the vote and 108 seats in parliament. The party's talks on forming coalition collapsed on 7th May, and the attempt passed to Syriza.
On 8th May, Syriza was given three days to form a coalition.
Greek Socialist leader Evangelos Venizelos has rejected joining a coalition led by a leftist party opposed to an international bailout.
However, said he would continue efforts to form a government when he receives a mandate from the country's president.
After meeting with Left Coalition leader Alexis Tsipras, Venizelos said:
"At the current stage we cannot reach a deal, but must continue the effort."
The European Commissioner for Economic and Monetary Affairs and the Euro, Olli Rehn, is to appear before MPs on the Commons European Scrutiny Committee next Wednesday.