Greece's parliament has been dissolved ahead of an early election that will be warily watched by markets and international creditors concerned that the austerity-weary country could starting unwinding unpopular fiscal reforms.

It was parliament's failure to choose a new president in three successive votes this month that triggered the snap poll.
As its first order of business, the new chamber must elect a successor to 85-year-old Karolos Papoulias, whose five-year term ends in March

A statement from the chamber on Wednesday confirmed the election would be held on January 25, as announced on Monday by Prime Minister Antonis Samaras, and the new parliament would reconvene on February 5.

Samaras had warned on Tuesday that the financially-stricken nation may be forced out of the eurozone if the election is won by radical leftist party Syriza which has vowed to reverse years of austerity imposed in return for financial aid.

"This struggle will determine whether Greece stays in Europe," Samaras told President Papoulias.

On Wednesday, Samaras warned again that Syriza planned "not to pay interest rates, and therefore to lead the country to a payment default and bankruptcy".

His assertion followed comments by two Syriza officials alluding to a debt repayment freeze if Greece's creditors refuse to renegotiate the country's bailout deal.

"Perhaps we shall not pay. Because we will negotiate and say that this programme is not viable," Yiannis Milios, the party's economic policy head, told Antenna TV.