Opponents call him arrogant, but Portugal's premier José Socrates must now embrace the delicate art of compromise after losing his absolute majority in Parliament in Sunday's vote, observers said.

"Socrates does not have any other choice. Without a parliamentary majority, he will be forced to negotiate, to compromise," the director of business daily Diario Economico, Antonio Costa, said of the Socialist Prime Minister.

The next state budget "will be a test of whether he understood what the Portuguese told him," he said.

The Socialists have 121 seats in the outgoing Parliament - the first majority by the party since the end of dictatorship in 1974 - which Mr Socrates used to pass hotly contested reforms to the nation's labour laws and health and school systems.

Called "arrogant" and "authoritarian" by his adversaries, he has said "I am a ferocious animal when I am convinced that I am right."

"José Socrates will have to learn to conjugate verbs that were rarely heard since 2005: cede, negotiate, discuss. It is asking from him a transformation that no one really believes he is capable of," wrote daily newspaper 'i' in an editorial.

The salt-and-pepper haired premier's tone started to change after the Socalists suffered a shock defeat in June to the centre-right Social Democratic Party, the main opposition party, in elections for the European Parliament.

Shortly after he said he may have lacked "delicacy" in his handling of certain issues, in particular a controversial education sector reform that sparked regular protests by teachers, and vowed to change. His new style continued during the general election campaign as Mr Socrates smiled more often, spoke in calmer tones and spoke regularly of "democratic humility".

Lisbon University political sociology professor Andre Freire said Mr Socrates' change of style was one of the factors which helped the Socialists win re-election on Sunday. "And the results of the elections require that he keep it up. It has not been the case up until now, but the key word is negotiate," he said.

"The change of attitude should be confirmed by actions and we will see if he manages to negotiate and pass agreements."

But Lisbon University politics professor Antonio Costa Pinto cautioned that Mr Socrates will have to be careful not to be seen giving up too much ground to get the support of other parties to pass legislation.

"He will have to maintain the fundamentals of his political programme though and govern from the centre-left. He can't give the image of ceding on core issues because the main challenge to the Socialists continues to be to its left," he said.

With only four seats representing Portuguese citizens residing abroad left to be attributed, the Socialists have 96 seats in the new parliament against 78 seats for the PSD, led by former finance minister Manuela Ferreira Leite.

The Communist-Green Party coalition captured 15 seats, one more than in the previous assembly, while the far-left Left Bloc, which called for the nationalisation of banks and insurance firms, doubled the number of seats to 16.

The conservative Popular Party, the only other formation to win representation, captured 21 seats, its best showing in 26 years. It had 12 seats in the outgoing assembly.

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