ATHENS: Greek Prime Minister Alexis Tsipras announced his resignation on Thursday and called for early elections in the crisis-hit country, as he tackles a rebellion by hardliners within his governing left-wing party who oppose the terms of the country's new bailout.

“I will shortly meet with the president of the republic and present my resignation and that of my government,” Tsipras said in a televised address to the nation.

Shortly before he announced his resignation, Tsipras defended his government's negotiating tactics and said Greece got the best deal possible for its three-year, 86 billion euro bailout from other eurozone countries.

Read: Huge bailout for Greece agreed

Government sources cited by the official news agency ANA said earlier he had proposed elections on September 20.

The government had been rumored to be considering early elections or a confidence vote since last week, when Tsipras faced a party rebellion over a bailout vote in parliament. It had delayed a decision until after it received the first installment from the bailout and made a debt repayment to the European Central Bank, both of which it did Thursday.

“The certainty is that the need for elections has arisen,” Energy and Environment Minister Panos Skourletis said on state television earlier Thursday.

He said that there are two reasons that the government, which came to power only nine months ago, would call for snap polls.

The first is that dozens of Tsipras' governing left-wing Syriza party lawmakers voted against the government on the bailout deal. Tsipras relies solely on opposition support to pass legislation in parliament. The government “has lost its majority (in parliament) – one can't avoid this,” Skourletis said.

The other reason was that Syriza is part of a government that needs to implement a program that is different to that which it was elected for.

Tsipras and his coalition government made a major U-turn in policy by accepting stringent budget austerity conditions that creditors had demanded in exchange for the 86 billion euro, three-year bailout program.

Tsipras and his radical left Syriza party came to power in January promising to scrap such spending cuts and tax hikes.

He has since said that accepting the terms was the only way to ensure his country remains in the eurozone, which opinion polls have shown the vast majority of his population wants.

Opinion polls have shown Tsipras to continue enjoying popular support and to be far ahead of his opposition rivals, although no polls have been published since the bailout deal was finalised.

A new mandate would allow him to move away from the hardliners in his party, some of whom have openly advocated leaving the euro and returning to the drachma. The hardliners, including prominent members such as former energy minister Panagiotis Lafazanis and possibly the flamboyant former finance minister, Yanis Varoufakis, are likely to split from Syriza.

Some analysts took the reports of early elections as an indication that Greece will struggle to implement its bailout.

The political uncertainty took its toll on the market, with the Athens Stock Exchange closing 3.5 percent down.

“The Greek stock market is coming into a new circle of uncertainty while we are waiting for new elections to be announced,” said analyst Evangelos Sioutis, head of equities at Guardian Trust Securities. “For the stock markets it is a factor of uncertainty.”

“Greece has capital controls, the economy is choking, and we will now have uncertainty from elections, so you understand that it has been a difficult month,” Sioutis said.

Greek banking is still restricted under capital controls imposed in late June to stem a bank run sparked after Tsipras called a referendum on creditor proposals for reforms following a breakdown in bailout negotiations.

There are weekly limits on cash withdrawals and Greeks can only transfer up to 500 euros abroad per month. Companies have faced problems paying suppliers abroad, with all international payments requiring a laborious process of approval by a special finance ministry committee.

Read: Greek banks are dying fast

Greece received the first 13 billion euros ($14.5 billion) from its new bailout package on Thursday, allowing it to repay its ECB debt and avoid a messy default.

Greece could not have afforded the debt repayment, which was confirmed by the debt management agency, without the rescue funds from 18 other European nations that share the euro currency. Missing the payment would have raised new questions about the country's ability to remain in the euro.