The ruling Greek Syriza party has split in two ahead of a snap election with hardliners breaking away to form their own independent movement.
Local media reports suggest that 25 Syriza rebels will join the new party, called Leiki Anotita (Popular Unity). Former energy minister Panagiotis Lafazanis, a vocal critic of the new bailout deal, will lead the new party.
It comes after Greek prime minister Alexis Tsipras resigned last night having spent just seven months in office. Tsipras gave the conservative opposition a chance to form a new government, but the effort is widely expected to prove unsuccessful, paving the way for an election for 20 September.
Read more: Tsipras resigns and calls snap election
Tsipras lost support from the far-left of his party after agreeing to domestically unpopular reforms such as more austerity and a range of other economic policies. But the agreement enabled Greece to receive the first tranche of its €86bn (£62bn) bailout programme yesterday.
Slovak finance minister Peter Kažimír slammed Tspiras for the "cynical" timing of his resignation - referencing its closeness to the first release of financial aid - however he belief the Greek government would implement agreed reforms remained more important.
"We respect Mr. Tsipras decision, but I can't help feeling it's a bit cynical timing to do it immediately after the first disbursement," Kažimír said in a tweet.
"Nevertheless, we have to believe that any Greek govt to come will implement what was agreed. It's the most important thing."
But the European Commission sought to alleviate concerns Tsipras' resignation could derail the new deal, saying today that the reforms had been approved by a majority of the Greek parliament.
"We are not concerned about program implementation," a spokesperson for the European Commission said.
"Reforms have been decided by the Greek government and voted on by the parliament. Regardless of elections, reforms can be implemented."
Analysts had said the biggest risk from the snap polls was their potential impact on the new bailout deal. Further disbursements are dependent on the implementation of unpopular reforms to its health, welfare and pensions systems, as well as taxation.