Greek PM Seeks To Form Coalition Government

The Greek prime minister has launched efforts to form a coalition government to run the country for the next four months, arguing the move is vital to demonstrate Greece's commitment to the eurozone.

George Papandreou met President Karolos Papoulias, hours after narrowly winning a confidence vote in the socialist-led parliament on a pledge that he was willing to step aside and form a cross-party caretaker government.

"Cooperation is necessary to guarantee - for Greece and for our partners - that we can honour our commitments," Mr Papandreou said at the start of Saturday's meeting.

"I am concerned that a lack of cooperation could trouble how our partners see our will and desire to remain in the central core of the European Union and the euro."

But it remains unclear whether the main opposition conservatives and other parties will take part in the talks and drop a demand for an immediate general election.

Mr Papandreou survived the knife-edge confidence vote, winning by 153 votes to 144 after announcing he intended to hold power-sharing talks, and signalled that he was ready to quit after two years in power.

His plan to form a four-month coalition government is aimed at securing continued rescue funds for the near-bankrupt country.

Mr Papandreou has been heavily criticised after two days of chaos that saw him propose a referendum on the 130bn-euro rescue deal to save the country from bankruptcy.

The idea was swiftly binned after a bad response from markets and European leaders gathered for the G20 summit in Cannes.

Calling for support before the vote, he said the bailout package agreed last week was a "national priority".

He said: "The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort... I never thought of politics as a profession."

But he warned that snap elections could be "catastrophic".

The leader was in a vulnerable position because his Pasok party held a small majority of just 152 out of 300 seats.

Mr Papandreou may have won the confidence vote in Athens, but days of political turmoil lie ahead amid divisions in his own party as well as the calls for immediate elections from opposition members.

Much of Europe was shocked last Monday when Mr Papandreou abruptly announced that he would put the £100bn rescue plan to the Greek people.

French president Nicolas Sarkozy and German Chancellor Angela Merkel summoned Mr Papandreou to Cannes on Wednesday amid the G20 gathering.

He was warned that the referendum could mean Greece exiting the euro, and a loan worth billions that it needed to pay government salaries was to be frozen.

The Greek leader dropped the referendum and said it "was never an end in itself" , suggesting he had made the call to force political agreement.

The EU bailout deal agreed on November 3 would also see banks write off 50% of debt held by Greece, where austerity measures have been deeply unpopular.