ATHENS (AFP) – Greece's president was set Saturday to call last-ditch talks in a bid to forge an emergency unity government and avoid fresh elections, after the main parties failed to form a working coalition.

Highly-indebted Greece is deeply torn over the tough austerity measures imposed as conditions for its IMF-EU bailouts, and the crisis has raised the threat it could default and leave the 17-member eurozone.

Legislative elections last Sunday saw voters punish the mainstream parties and left a fractured political landscape that has raised the spectre of new elections within weeks, amid intense EU pressure over Greek finances.

Socialist Pasok leader Evangelos Venizelos said Friday he had failed in the latest bid to form a government, after radical leftist party Syriza refused to join a pro-austerity coalition with the socialists and conservatives.

The latest twist in the tortuous political drama came as EU paymaster Germany threatened to cut off the country's loan lifeline and hinted that the crisis-ridden eurozone could get along without Greece.

Venizelos was the third party leader who tried and failed to cobble together a government after the inconclusive elections.

"I am going to inform the president of the republic (Saturday) and I hope that during the meeting with Carolos Papoulias, each party will assume its responsibilities," Venizelos told reporters in Athens.

The head of state is then expected to urge party leaders to form a government of national salvation. If the parties cannot agree a compromise by next Thursday, new elections will have to be called.

Venizelos had been hoping to win the support of Syriza, a party deeply opposed to the terms of the 240 billion euro ($311 billion) EU-IMF bailout and which surged to second place in Sunday's vote.

Earlier, another possible ally, the small Democratic Left party, said it would not join a government made up of only Pasok and the conservative New Democracy party that did not include Syriza.

Earlier this week both Syriza and the New Democracy party failed in their own attempts to assemble a coalition government.

German leaders warned Friday that Athens could expect no more money without reforms and also suggested that the eurozone would cope if the cash-strapped country left the 17-member currency union.

Greece has already committed to finding in June another 11.5 billion euros in savings over the next two years. It also needs to redeem 436 million euros in maturing debt on May 15.

Brussels on Friday revised downwards its economic forecasts for the country at the epicenter of the eurozone debt crisis.

The European Commission said the economy is expected to contract by 4.7 percent this year and see zero growth next year.

Fitch credit rating agency warned that the emergence of a Greek government "unwilling or unable to abide by the terms of the current EU-IMF programme would increase the risk of Greece leaving the eurozone".

"If they are required, the re-run elections will therefore be a critical event for both Greece and for the eurozone," it said in a note.

An opinion poll published Friday showed that Syriza could even emerge as the victor if new elections are held in June.