GREEK PRIME MINISTER George Papandreou said he will form a new government tomorrow and seek a vote of confidence from his parliamentary party.

Mr Papandreou made the shock announcement in a live TV address after a day of violent street protests against his austerity plans, the Guardian reports.

He said:

Tomorrow I will form a new government and then I will ask for a vote of confidence. I will continue on the same course. This is the road of duty, together with (ruling party) PASOK’s parliamentary group, its members and the Greek people.

Earlier government sources said he had offered to step down and make way for a national unity government if the opposition agreed on a new reform plan, the Wall Street Journal reported.

Mr Papandreou is under pressure to push through a new five-year campaign of tax rises, spending cuts and sell-offs of state property to continue receiving aid from the European Union and International Monetary Fund and to avoid default.

In a day of more street protests,  youths earlier threw petrol bombs at the Finance Ministry and tens of thousands marched on parliament to oppose new austerity laws for the debt-choked euro zone state.

Read more: Tear gas fired at protesters in Greece as thousands march against austerity measures>