Greek PM George Papandreou has said he is ready to drop a proposed referendum on the country's eurozone bailout deal.
Mr Papandreou offered to hold talks with the opposition to seek consensus on the deal, adding that the referendum was never an end in itself.
Four ministers, including influential Finance Minister Evangelos Venizelos, opposed the referendum and there were calls for the prime minister to resign.
EU leaders say Greece cannot get bailout cash until it agrees the deal.
Earlier the BBC reported that the PM was preparing to resign but state TV said he had ruled this out.
The opposition New Democracy party has said it would accept taking part in a coalition government if Mr Papandreou agreed to stand down.
The BBC's Mark Lowen, in Athens, says that whatever the outcome, Greece has been thrown into a period of intense political instability.
The EU bailout, agreed last month, would give the heavily indebted Greek government 130bn euros (£111bn; $178bn) and a 50% write-off of its debts, in return for deeply unpopular austerity measures.
Officials quoted Mr Papandreou as saying Greece had been faced with a choice between "true assent" - apparently meaning agreement between the major parties - and a referendum on the package.
"The referendum was never an end in itself," he said.
"I'm glad that all this discussion has at least brought a lot of people back to their senses.
"I will talk to [New Democracy leader Antonis] Samaras so that we examine the next steps on the basis of a wider consensus."
He met MPs from his Pasok party and is speaking to parliament ahead of a confidence vote on Friday.
Pasok holds a slim majority in parliament, 152 out of 300 seats.
But Mr Papandreou was faced with a parliamentary revolt after several of his MPs withheld their backing. Some called for early elections or a government of national unity instead.
Mr Samaras called for a caretaker government to safeguard the EU deal.
"I ask for the formation of a temporary transition government with the exclusive responsibility to immediately hold elections, and ratify the loan deal under the present parliament," he said, quoted by AFP news agency.
A government spokesman said it was ready to talk to the opposition about the issue.
"We welcome New Democracy's decision to support the 26 October deal," said spokesman Ilias Mossialos, referring to the EU bailout deal.
"As far as the other proposals are concerned, we are ready to seriously discuss them, in the interest of the country."
An unnamed minister told Reuters news agency Mr Papandreou would not take a decision on resignation until he knew the outcome of talks with New Democracy.
One Pasok rebel MP, Eva Kaili, told the BBC: ''I think now the only solution is to have a new government of national rescue and co-operation led by a person that is recognised by the majority [as] prime minister and tries to uphold the agreement [on the EU bailout] of 26 October."
The row threatens to overshadow a meeting of the G20 in Cannes, where leading industrialised nations are to discuss the eurozone debt crisis.
Mr Papandreou told reporters in Cannes his referendum would in effect be a vote on whether Greece should remain in the euro.
"The treaty doesn't foresee an exit from the eurozone without exiting the EU," spokeswoman Karolina Kottova told a briefing in Brussels.
Earlier, the chairman of the group of eurozone countries, Jean-Claude Juncker of Luxembourg, said plans were in place for a Greek exit from the euro.
"We are absolutely prepared for the situation that I have described and do not want to see come about," Mr Juncker told German ZDF television.
Mr Venizelos launched the parliamentary revolt in the early hours of Thursday with a statement saying Greece's membership of the euro could not be put in doubt.
"If we want to protect the country we must, under conditions of national unity and political seriousness and consensus, implement without any delay the decision of 26 October. Now, as soon as possible," Mr Venizelos said.
Mr Venizelos is a former challenger for the Pasok leadership. In 2004, he was defeated by Mr Papandreou by 56% to 38% in a party vote.
Greece was due to receive the next tranche of funds from its first bailout later this month. However, the EU has said it will not transfer the 8bn euros until after the referendum.