The bank chairman set to take the key post of finance minister in Greece's new government has turned down the job.

He continued to receive hospital treatment for what a spokesman said was a "chronic" condition.

Vassilis Rapanos, who heads up the National Bank of Greece, was nominated last week following landmark elections on 17 June.

But he was taken to hospital on Friday suffering from strong stomach pains and nausea.

Unlike other members of the cabinet, Mr Rapanos had not been formally sworn in, meaning that the finance minister from the previous government, George Zanias is still in charge.

The new government has been hobbled by health troubles after less than a week in office.

Prime Minister Antonis Samaras had a major eye operation over the weekend that will force him to miss a critical European Union summit this week.

This has added to uncertainty as the government heads for a showdown with the EU and International Monetary Fund over its attempt to ease the terms of a massive bailout deal that is keeping the economy on life support.

Officials said Greek President Carolos Papoulias will have to attend the EU summit on Thursday and Friday.

Mr Samaras left hospital today under orders to stay at home for at least a week to recover from the operation on his retina.

The 83-year-old Mr Papoulias, a former foreign minister, occupies a largely ceremonial post and is not normally involved in high-level diplomacy.

At the summit, Greece is expected to outline its plan to ease the austerity terms of the bailout, even though chief paymaster Germany has already signalled there is little room for negotiation and no decisions are expected at the talks.

Mr Samaras's absence has delayed the holding of a formal vote of confidence in parliament for the new three-party coalition that is now expected next Monday.

The health troubles have also delayed indefinitely a visit by EU and IMF auditors originally scheduled for Monday, which is a key precondition for Greece to receive any more loans to supplement its rapidly shrinking cash reserves.

The announcement about Mr Rapanos came after days of rumours on the 65-year-old's condition.

"My recent hospitalisation shows my health problem has not been overcome," Mr Rapanos said in a letter to Mr Samaras made public by the premier's office.

"Following discussions with doctors, I have decided my state of health does not allow me to take on these duties for the moment," he added.

The nomination was being closely watched by the markets and had been hailed as positive because of Rapanos's experience in both the banking sector and public office as a top economy ministry official when Greece joined the euro.