Elections were not due before 2011, but the opposition socialists would have forced an early vote in March, pushing Karamanlis to take a risky gamble and pick a date although his conservative New Democracy party lags behind PASOK in polls.
"The consequences of the economic crisis are visible [...] Taking necessary measures imposes one solution: the clearing of the political landscape and a fresh popular mandate," Karamanlis said in a televised speech on Wednesday.
Karamanlis will visit the Greek president at about noon today to seek his consent and announce the date - which a senior government source said will be 4 October.
Fading support for the government, dragged down by discontent with a sharp economic slowdown and scandals, was hit even more after criticism of its response to forest fires near Athens last month (see EurActiv 24/08/09).
Attacks such as a car bomb which exploded outside the Athens stock exchange on Wednesday, which police suspect was staged by a leftist or anarchist group, have further hurt the government. Greece also suffered its worst riots in decades in December (EurActiv 11/12/09).
The conservatives are about six percentage points behind the main opposition socialists in opinion polls. But analysts said New Democracy would face an even harsher defeat if it waits.
"The prime minister has taken a politically risky decision. PASOK has undoubtedly a political headstart into this campaign," political analyst Takis Theodorikakos said.
Seen by investors as the euro zone's weakest link, Greece's economy faces this year its first recession since 1993 while its national debt is ballooning.
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.
"It's time for a new course," said PASOK leader George Papandreou, who advocates a "green growth" economic programme. "We have the strength and the courage to clash with everything that holds our country back."
(EurActiv with Reuters.)
