The third-placed Pasok will now try to form a coalition government in Greece after the much expected leftist Syriza party failed on Wednesday night.
Talks between the leftist leader Alexis Tsipras and leaders of other parties proved futile as they could not come to any understanding after the meeting.
"We saw that our proposal enjoys broad social support but weak parliamentary backing. We can't make our dream come true and form a left-wing government," the Press Association quoted Tsipras as saying after the meeting.
Tsipras asked both the main parties to give up the vows they made in return for the bailout which they rejected outright.
The crisis has now deepened after the runner-up party also was unsuccessful in bringing a consensus.
According to reports, the situation may lead to the expulsion of Greece from the single currency EU bloc.
The political deadlock is severely hurting the country as its reserves will also run dry in June.
As the nation runs on the funds provided by the EU and the IMF, some impatient governments have reportedly temporarily suspended part of their latest rescue funds.
The Pasok party is still confident of forming the government. "I will continue the effort because it is in the nation's interest.
Prolonging this uncertainty only hurts the country and its economy, and in the end, the weakest and the unemployed," Pasok's leader Evangelos Venizelas told reporters, according to Reuters.
But analysts are of the opinion that the country is heading towards another election since the chances are extremely slim for any party to form a government by 17 May.
The political turmoil is also impacting the financial markets. Given the present economic situation, another election around the corner will surely not be great news for the country, suggest experts.
"We do not think global equity markets will react favourably to the scheduling of additional Greek elections which themselves are just as likely to be as inconclusive as the previous elections," Business Week quoted Dan Greenhaus, chief global strategist at BTIG, as saying.
Analysts also point out that the political uncertainty within Greece raises the threat of increased contagion with the eurozone's vulnerable markets. European leaders are also keeping their fingers crossed.