Greece will hold a repeat election on June 17, a source from the Democratic Left party told Reuters.
Greeks have withdrawn hundreds of millions of euros from banks across the country, apparently afraid of the prospect of rapid devaluation if the country leaves the European single currency.
Central bank head George Provopoulos told President Karolos Papoulias savers withdrew at least €700 million on Monday. The minutes of Papoulias's meeting with other political leaders reported the president as saying:
Mr Provopoulos told me there was no panic, but there was great fear that could develop into a panic.
Withdrawals and outflows by 4pm when I called him exceeded €600 million and reached €700 million. He expects total outflows of about €800 million.
Greek political leaders will meet today to form a caretaker Government to take the country through to a June election - the second in just over a month.
President Karolos Papoulias was forced to call a new vote after failing to form a coalition Government and polls suggest that radical left party Syrzia - who have pledged not to follow the bailout terms - will win the re-run.
That prospect has shaken faith in Greece's ability to remain in the single currency and stay solvent, sending the euro and European shares lower.
A failure by political leaders in Greece to form a coalition Government raised fresh concerns over its future in the eurozone and triggered further losses on the London market today.
The FTSE 100 Index was 74 points down at 5363 after newly elected Greek politicians - divided over how to resolve the country's economic crisis - were unable to reach an agreement, forcing a new election to be held in June.
Greek depositors withdrew €700 million (£557 million) from banks on Monday, according to the country's president.
Greek banks have seen a steady decline in deposits since the country's debt crisis began in 2009, as depositors have withdrawn cash and transferred funds to overseas banks.
In the past two years, deposit outflows have averaged between €2 billion and €3 billion per month, though in January they topped the €5 billion mark.
Head of the IMF Christine Lagarde said she hopes Greece will not leave the euro but admitted "we have to be technically prepared for anything".
Greece will hold new elections after political leaders failed to find agreement on a coalition Government, a spokesman for the Greek president said.
A caretaker government to lead the country to fresh polls will be appointed on Wednesday, the spokesman said after party leaders held a final round of talks.
"We're heading to elections," the spokesman told reporters.
Angela Merkel is adamant that austerity has to stay, and that means cuts, but she is not against growth because no politician would be.
I think that president Hollande can come away later today with some commitments for a growth pact bolted onto the austerity rules that Germany wants.
But, behind the scenes, the reason why Germany is being so strict is that it wants those countries in trouble to follow its lead in becoming more competitive, which means working longer for less.
They are only going to agree this with a bit of an arm twist.
Shadow Chancellor Ed Balls said the British recession was "made in Downing Street" after the eurozone narrowly missed going into recession today, with the region showing 0.0% growth in the last quarter.