The government could push the reforms through without the support of the Democratic Left. But a vote against the package by the party would undermine the fragile coalition and could encourage other lawmakers to vote against unpopular measures.
A Greek coalition partner confirmed on Tuesday that it would vote against labour reforms proposed by foreign lenders, ignoring the prime minister's appeal for a united front to push through more unpopular austerity.
The Democratic Left party's refusal to back the reforms leaves the government facing an unpredictable vote when they are presented in the Greek parliament next week, making it the fragile coalition's biggest test since taking power in June.
"The Democratic Left has fought on the issue of labour relations, to protect workers' rights which have been already weakened," the party said in statement. "It does not agree with the result of the negotiations. The Democratic Left sticks to its position."
A party official, Dimitris Hatzisokratis, told Reuters the party would not vote in favour of the labour reforms.
Prime minister Antonis Samaras earlier announced that Athens had completed talks with European Union and International Monetary Fund lenders on a package of 13.5 billion euros ($17.4 billion) in austerity measures and implored allies to back the plan.
"What would happen if the deal isn't passed and the country is led to chaos?" Samaras said in a statement. "Such dangers must be avoided. That is the responsibility of each party and every lawmaker individually."
The government is expected to include a large chunk of the austerity measures in the 2013 budget bill to be presented on Wednesday, with the remaining measures and contested labour reforms in a separate bill to be put before the parliament on Monday.
The Democratic Left party has the support of 16 deputies in the 300-seat house. The government — which has 176 seats in the house — could pass the reforms without its support. But a vote against the package by the party would undermine the already fragile coalition and could encourage other lawmakers to defect and vote against unpopular measures, leaving the outcome uncertain till the end.
Already some lawmakers from the other junior partner in the coalition, the Socialist PASOK, have threatened to vote against the measures, though the party's leader has hinted the group will vote in their favour to ensure stability in Greece.
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