A faction from Greece's governing left-wing Syriza are set to break away and form a new party.

Prime Minister who is alsothe national leader of Syriza leader; Alexis Tsipras stood down on Thursday, paving the way for new elections.

The move came after he lost the support of many of his own MPs in a vote on the country's new bailout with European creditors earlier this month.

Greek media reports say 25 rebel Syriza MPs will join the new party, called Laiki Enotita (Popular Unity).

The party will be led by former energy minister Panagiotis Lafazanis, who was strongly opposed to the bailout deal.

At a press conference in Athens, Mr Lafazanis said he was ready to respect the result of a referendum held in July, in which 61% of Greeks said they would not support the terms of the bailout.

Mr Lafazanis was quoted by Kathimerini newspapers as saying "If it is necessary for us to cancel the memorandum, we will follow the course of exiting the euro,"

Syriza won 149 seats in Greece's 300-seat parliament in the last election in January.

The new Popular Unity party becomes the third largest in parliament.

In exchange for a new €86bn ($95bn; £61bn) from European partners, Mr Tsipras had to agree to painful state sector cuts, including far-reaching pension reforms - and keep Greece in the eurozone.

Close to a third of Syriza's MPs abstained or voted against the terms of the new deal last week. At the time, Mr Lafazanis said he was determined to "smash the eurozone dictatorship".