The Greek conservative party leader, Antonis Samaras, has said that he has concluded that he is unable to form a new coalition government.
As the leader of the largest party in parliament, Mr Samaras had three days to try and hammer out a deal.
However, after just one day of talks with other party leaders he has told President Carolos Papoulias that he cannot secure the necessary support.
Many had predicted that yesterday's election results, which saw voters desert the two main parties over their support for the EU-IMF bailout, would usher in a period of political instability.
It seems that prediction will be proven to be true.
The 37-year-old head of the second-placed Coalition of the Radical Left, Alexis Tsipras, who is vociferously opposed to the bailout, will now try and form a government.
However, few believe he will have the numbers either.
Amid the ongoing political circus, the Greek stock exchange fell by more than 6%, while political pressure was also being exerted from outside the country.
German Chancellor Angela Merkel said Athens would still be expected to live up to the provisions of the bailout it signed.
The European Commission stressed the need for "full and timely implementation" of the deal.
Mr Samaras, who heads the New Democracy party, said his efforts to form a "national salvation" administration had failed, meaning radical leftist party Syriza will now be tasked with forming a government.
"I did whatever I could to secure a result but it was impossible," Mr Samaras said in a televised address after a day of separate meetings with fellow leaders.
"I informed (head of state President Carolos Papoulias) and returned the mandate," the 60-year-old leader said.
Mr Samaras was rebuffed by Syriza and the small Democratic Left group, while the nationalist Independent Greeks and the Communist party refused to even meet with him.
Third-place socialist Pasok, formerly in a coalition with New Democracy, agreed to co-operate but only if the leftists also joined.
The parties' snub of Mr Samaras indicates they are paying more attention to the punishing message sent yesterday by voters fed up with austerity measures than to worries about the future of the euro or stern warnings from Berlin and Brussels.
New Democracy had said Mr Samaras would try talking with every party that won seats in parliament except the neo-Nazi Golden Dawn.
A new government has to be formed by 17 May or new elections will be called.
