Greek Prime Minister George Papandreou has lost the support of three of his MPs ahead of a crucial confidence motion in his government.
The Greek cabinet is meeting in emergency session at 10:00 GMT (12:00 local) after governing Pasok party MPs withdrew their support for a referendum on the eurozone bailout for Greece.
Pasok holds 152 of 300 seats, implying Mr Papandreou could face defeat.
The meltdown started after Finance Minister Evangelos Venizelos broke ranks with him on the referendum proposal, which horrified Greece's international partners and creditors, triggering turmoil in financial markets as investors fretted over the prospect of a disorderly debt default and the country's exit from the eurozone.
With open rebellion among his ranks, it's unclear whether it can survive that long and many in Greece are calling on the establishment of a national unity government, incorporating the opposition.
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Earlier on Thursday, Socialist MP Eva Kaili also said she would not support the government in the confidence vote. Without her support, the Socialists hold a single-seat majority in the 300-member parliament.
"Right now, the country is headless," conservative opposition New Democracy Party spokesman Yiannis Mihelakis said.
Venizelos said the country's attention should be focused on getting a crucial instalment of bailout funds quickly. This has been delayed because of Papandreou's decision to back a referendum into a bailout package agreed just a week ago.
"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos said in a statement issued shortly after his return in the early hours of Thursday from Cannes, where he'd accompanied Papandreou.
Venizelos said Greece's participation in the eurozone and EU membership "cannot depend on a referendum" and that the next instalment should be disbursed "without any distractions or delay".
Although he had defended Papandreou's decision to hold a referendum in a speech delivered immediately after the prime minister's announcement on Monday, an official close to the finance minister has said Venizelos had not been told in advance that Papandreou was to announce a public vote.
On Wednesday, French and German leaders told Papandreou any referendum should be on whether Greece wants to stay in the eurozone or not, adding that Athens would not get critical bailout funds until after the vote.
An initial date of December 4 has been suggested for the vote. But Greece has said that without the next eight billion euro- ($A10.68 billion) instalment of its existing bailout fund, the country runs out of funds in mid-November.
Greece's new debt deal would give the country an extra 100 billion euros in rescue loans from the rest of the eurozone and the International Monetary Fund (IMF) - on top of the 110 billion euros it was granted a year ago - and would see banks forgive Athens 50 per cent of the money it still owes them.
Other ministers and governing Socialist Party deputies distanced themselves from the prime minister's referendum idea.
Development Minister Michalis Chrisohoidis issued a statement calling for unity, and saying the priority was for parliament to ratify the new debt deal.
"There can be no... return to the drachma and the past," Chrisohoidis said.
"We must all assume our responsibilities."
Speaking in Cannes, Papandreou said he was forced to call the referendum after it became clear there was no "broad support" from opposition parties for the bailout deal reached with the rest of the eurozone and big banks just a week ago.
Turning the referendum into a popular vote on whether Greece wants to remain in the eurozone is a risky bet that could lead to turmoil throughout the bloc.
