Greek Elections

With more than 94 percent of ballots counted, the New Democracy Party had 42.17 percent of the vote and 153 seats in the 300-seat Parliament, ahead of the main opposition socialist PASOK party which won 38.23 percent and 103 seats.

"Thank you for your trust," Prime Minister Kostas Karamanlis said as thousands of New Democracy party supporters flooded the streets of central Athens in celebration of the conservatives' victory.

"You have spoken loud and clear and chosen the course the country will take in the next few years," he said.

The election, called six months early, pitted Karamanlis, the 52-year-old nephew of the late President and Prime Minister Constantine Karamanlis, against PASOK leader Giorgos Papandreou, son of the late charismatic Prime Minister Andreas Papandreou.

Both major parties lost support to smaller parties.

New Democracy held 165 seats in the outgoing parliament and will retain a slim majority with considerably fewer seats, hinting at some public discontent. Fewer seats will make it harder for the next government to carry out austere economic and education reforms, which analysts say are necessary to move the country forward.

Turning away from the socialists

Initial results also showed the Greek public turning away from the main opposition socialist party, which was at 38.23 percent compared to 40.6 percent in the 2004 elections.

The far-right LAOS party was seen winning 3.71 percent of the vote and 10 seats -- just above the 3-percent threshold needed to enter parliament for the first time.

The Communist party (KKE) had 7.97 percent (21 seats), up from 5.9 percent in 2004, and the left-coalition was at 4.93 percent (13 seats), up from 3.3 percent.

The elections were seen as critical for implementing reforms needed in the euro zone's second poorest economy, including overhaul of the pension system, which risks going bankrupt within 20 years, and completing state privatizations.

Greece's per capita gross domestic product is the second lowest in the Eurozone after Portugal, and nearly 20 per cent of Greeks live below the poverty line.

A risky move

Karamanlis has been applauded by the European Union for cutting deficits and creating thousands of jobs, but the unemployment rate still hovers above the EU average.

Confident that he could secure an easy victory, Karamanlis called for snap elections in August but barely a week later found himself facing harsh criticism over the government's slow and confused response to the recent forest fires, which killed 65 people.

The Socialists, accused of their own scandals over their 20-year ruling history, did not seem to take advantage in their election campaign of the government's own woes.