Greek Prime Minister Costas Karamanlis, who is grappling with an economic crisis, scandals and low poll ratings, on Wednesday called a snap election which he will struggle to win, Reuters reported.
Karamanlis said he needed a fresh mandate to deal with the economic downturn.
But his conservative New Democracy government trails the main opposition PASOK socialists by about 6 percentage points, indicating he is set to lose the Oct 4 vote.
Analysts said, however, that he might face a more embarrassing defeat six months down the road.
PASOK may not gather enough votes in this snap vote to form a government alone, which would plunge Greece into political uncertainty as it struggles to cope with the global slowdown.
"I am seeking a fresh political mandate," Karamanlis, 52, said in a televised speech.
He gave no date but a senior government source said it would be held on October 4.
"The consequences of the economic crisis are visible, we have two difficult, crucial years ahead of us," he said. "Taking necessary measures imposes one solution: the clearing of the political landscape and a fresh popular mandate."
On the day that a large bomb exploded outside the Athens stock exchange, causing heavy damage and wounding one woman, Karamanlis ended weeks of speculation on his intentions as his party kept dropping in opinion polls.
"It is obvious that the prime minister concluded that it was preferable to call elections now rather than drag on with his government and end up with a worse electoral result in March," political analyst George Sefertzis said.
"(He) is aiming for a smaller electoral defeat for himself and his party and a smaller majority for the Socialists."
The government's support ratings were hit even more after criticism of its response to forest fires near Athens last month. Attacks such as Wednesday's car bomb, which police suspect was stages by a leftist or anarchist group, have further hurt the government.
Seen by investors as the euro zone's riskiest bet, Greece's economy faces this year its first recession since 1993 while its national debt is ballooning.
"We have to put emphasis on getting the economy moving," Karamanlis said.
Elections were not due before 2011 but PASOK had said it would force one by March, when parliament elects a new president, pushing Karamanlis to pick a moment. His four-year term would normally end in 2011.
The socialists, themselves burdened with scandals during decades in government, advocate a "green growth" economic model.
"We have the knowledge and the political will, we know the problems," Papandreou said. "We have a plan for growth and for an exit from today's crisis."
PASOK has said that if the election fails to win an outright majority, it will call for a second vote under a revised electoral law that makes it easier to form a government with fewer votes.
National elections in Greece are traditionally coupled with government handouts and a freeze in implementing policy. Foreign rating agencies have warned against relaxing fiscal policy during the campaign.
"We do not expect at this stage that the elections will have any significant effect on the economy. It remains to be seen, however, whether the incumbent government can rein in spending during the campaign," said Marko Mrsnik, an analyst at Standard and Poors.
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