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By COSTAS PARIS And ALKMAN GRANITSAS

ATHENS—Greece's Socialist Prime Minister George Papandreou is expected to name former European Central Bank Vice President Lucas Papademos as prime minister of an interim government, barring any last-minute hitches, a senior party official said Tuesday.

WSJ's Alkman Granitsas reports on a change in government in Greece, required under the terms of the country's 130 billion Euro aid deal. Prime Minister George Papandreou announced his resignation last week. Photo: REUTERS/Yannis Behrakis
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The announcement is expected later in the day and follows days of talks between the Socialist government and the opposition New Democracy party over a new leader to head the government.

Mr. Papademos was seen as front runner, but his candidacy appeared to run into hurdles Monday after he placed conditions under which he would serve.

"Mr. Papandreou is meeting with Mr. Papademos and many of Mr. Papademos's requirements have been met," the official said. "Unless there is a last minute breakdown, I expect him to be the interim prime minister."

At issue is a demand by Mr. Papademos that the new government should serve for a term of several months—longer than either the ruling Socialist government or the New Democracy envisioned for the interim government.

Additionally, Mr. Papademos is seeking a cabinet made up of political heavyweights that would be capable of making the tough decisions—and without interference from party leaders—needed to push through Greece's reform program.

Local press reported that New Democracy has now agreed to both of these conditions after initially opposing the steps.

Talks between the ruling Socialists and New Democracy started last week in an attempt to agree on who will take the helm of the country after the two parties agreed Sunday to form a coalition government.
 
A combination of two recent pictures shows current Greek Finance Minister Evangelos Venizelos, left, and former vice-president of the European Central Bank Lucas Papademos, right.
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Mr. Papandreou's expected departure after a tumultuous two years in power follows more than a week of turmoil that started with his call for the referendum and climaxed in a vote of confidence early Saturday morning. Mr. Papandreou carried the vote, but said he would start the procedure for a coalition government to take over.

The interim government is charged with implementing Greece's freshly minted €130 billion aid deal before leading the country to fresh elections in February.

Other names, however, have also been raised and remain in the wings, including European Union Ombudsman Nikiforos Diamantouros and International Monetary Fund director Panagiotis Roumeliotis, who has been summoned back to Athens.

"If there is a last minute breakdown, one of the others could become prime minister," the official said.

On Tuesday, Greece's cabinet met in an emergency meeting to decide on the make up of the new government. The meeting is currently in progress.

—Stelios Bouras contributed to this article.wsj