Unity government saga continues [continuous updates]

Greece’s politicians were holding a fresh round of talks Thursday aimed at picking an interim administration and prime minister for the crisis-wrecked country, after negotiations once again hit an impasse on Wednesday.

A meeting between President Karolos Papoulias, Prime Minister George Papandreou, conservative New Democracy leader Antonis Samaras and nationalist LAOS party leader Giorgos Karatzaferis started at 10 a.m. on Thursday at the Presidential Palace.

Former European Central Bank Vice President Lucas Papademos is the clear front-runner for the post. He arrived at the palace to join the talks just after 12 p.m.

The transition government must shepherd through Parliament a controversial 130 million euro bailout package and end an intense political crisis that has brought Greece closer to default and eurozone exit.

“This is the third time I have come here for this [issue]. I hope it’s the last one,» Samaras was quoted as saying while entering the palace on Thursday.

In a bow-out speech Wednesday Papandreou confirmed his PASOK party and New Democracy conservatives would join the coalition, but he did not name a successor. He said that the new administration would back the conditions of the EU rescue package.

But talks among Greek party leaders later broke down as Karatzaferis stormed out of the President’s office accusing Papandreou and Samaras of political point scoring, although he later agreed to join fresh talks Thursday.

Papademos appears to have set a number of conditions to join the new government, which were reportedly discussed between PASOK and ND leaders in a late telephone call late Wednesday. These include a longer spell for the interim administration, more conservative cadres in it than previously suggested by ND, and ? more controversially for Samaras ? a written pledge that PASOK and ND will respect the terms of the EU/IMF bailout.

Samaras aides early Thursday denied Papademos has set any terms.

“I hope that the two parties will today reach an agreement on Papademos,» Stefanos Manos, a former finance minister, told Skai television on Thursday.

Papademos’s name is back on the table after a large number of PASOK MPs, as well as ND deputies, were said to be vehemently opposed to the apparent choice of Parliament Speaker Filippos Petsalnikos – a close associate of Papandreou and a party stalwart – for interim premier.