Greek’s socialist leader said yesterday he was making progress towards assembling a coalition government, but was still well shy of the parliamentary majority that has eluded two other parties.

Evangelos Venizelos, leader of the Pasok party, won the support of the small Democratic Left (Dimar) party in negotiations to form a cabinet after Sunday’s inconclusive election witnessed an anti-austerity backlash by voters in the debt-laden nation.

“We have made a first step,” Mr Venizelos said, adding there had been a “good omen” in his meeting with Dimar leader Fotis Kouvelis.

Mr Venizelos, whose party came a distant third at the polls with 41 seats, had earlier said he wanted to create a unity government that would keep Greece in the eurozone – an aim echoed by Mr Kouvelis.

Mr Venizelos, 55, has scheduled talks with his main rivals and former coalition partners, the conservative New Democracy party, for 0700 GMT today.

The former finance minister acknowledged his task was “not easy”.

His efforts follow consecutive post-election failures this week by the first-placed conservative New Democracy party and the runner-up, the radical leftwing Syriza which had come out strongly against the tough spending cuts.

A fresh setback would result in President Carolos Papoulias calling on parties to form an emergency coalition. If that cannot be done by May 17, new elections for the 300-seat Parliament will be called.

Voters on Sunday punished Pasok and New Democracy for having pushed through punishing austerity measures in return for multi-billion-euro international loans to stave off bankruptcy and keep Greece in the eurozone.

However, many still believe repeat elections are almost certain.

“We will probably have elections in two months” even if a cabinet is formed, said Communist party leader Aleka Papariga.

The European Union is sending a strong message that Greece must honour the bailout conditions of budget cuts and deep reforms, after Mr Venizelos and New Democracy leader Antonis Samaras advocated renegotiating the deal to boost growth.

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