Greek Prime Minister George Papandreou has agreed to step down in favor of a short-term coalition government whose primary task will be reaching agreement on a new European Union bailout deal.

Mr. Papandreou, a socialist, met Sunday with the head of the opposition New Democracy party Antonis Samaras. The coalition will lead until new elections, which could come as early as March.

All sides will meet again Monday to decide who will lead the new coalition. But it will not be Mr. Papandreou. It is also unclear if he plans to run again next year.

The purpose of the temporary government is to get the Greek parliament and cabinet to accept the terms of a new European Union bailout. The deal requires Greece to raise taxes and make deeper cuts in government jobs and pensions.

Greece's political crisis was set off by Mr. Papandreou's surprise announcement last week that he would put the terms of the EU deal for Greece to a referendum. The proposal shocked the country and stunned the EU. The prime minister backed down from referendum plans under pressure from the EU and his own government and parliament.

European leaders have called on Greece to approve the new bailout plan and implement the terms of an existing rescue package drawn up by the European Union and International Monetary Fund last year. Some EU leaders have warned that Greece will not get any further aid if it fails to take those measures.

Greek Finance Minister Evangelos Venizelos has said Greece needs the next $11 billion installment of its existing bailout by December to avoid bankruptcy.