Greek Prime Minister George Papandreou handing in resignation Wednesday

Greek Prime Minister George Papandreou will hand in his resignation to the country's president Wednesday, his office confirmed to CNN. His resignation will come after he gives a televised address to the nation.

In an phone call earlier Wednesday, Papandreou told French leader Nicolas Sarkozy that the new government would have support from the majority and the opposition, the Elysee Palace said in a statement.

Papandreou is to meet Greek President Karolos Papoulias at 5 p.m. local time, state broadcaster ERT reported. It is not yet known what the outcome of that meeting might be.

The latest updates come a day after the prime minister said he was optimistic about the formation of a new government amid thorny discussions.

Papandreou and the main opposition leader, Antonis Samaras, have been locked in talks on who might lead the new government. Rumored contenders include Lucas Papademos, a former vice president of the European Central Bank and ex-governor of the Bank of Greece, currently a visiting economics professor at Harvard University.

The political turmoil in Greece has shaken international markets, as investors fear a new bailout deal negotiated with European leaders late last month - which has stringent austerity measures attached - may not be implemented.

Christine Lagarde, managing director of the International Monetary Fund, warned Wednesday of the potential for a "lost decade" if the world's nations do not join forces against the "dark clouds" gathering on the horizon.

Courtesy: http://news.blogs.cnn.com