Greek conservatives begin hunt for governing partners

Greece's conservative leader began a frantic hunt for partners to forge a coalition that protects the country's place in the euro zone after angry voters savaged the two ruling parties for imposing harsh wage and spending cuts.

President Karolos Papoulias summoned New Democracy party leader Antonist Samaras to talks at 12 p.m British time, where he is expected to be given a mandate to try and form a new government - a daunting task given the strong electoral showing of anti-bailout parties.

With counting from Sunday's vote almost complete, conservative New Democracy and Socialist PASOK, who are the only major parties supporting an EU/IMF aid programme that keeps Greece afloat, had won just over 32 percent of the vote and only 149 out of 300 parliament seats.

With Greece's parliament set to be the most fragmented for decades, coalition talks look tricky and raise the possibility of a new election as soon as next month if they fail.

"The election result is a riddle, with seven parties getting a share of the vote that's even lower than the value-added tax rate," said Vassilis Korkidis, chief of Greek retail group ESEE.

Greeks woke up to headlines like "Country in Limbo" from the Imerisia newspaper and "Nightmare of Ungovernability" in the Ta Nea daily.

The resounding success of anti-bailout parties - ranging from the extreme-right Golden Dawn to the fiery Left Coalition - risks pushing Greece off the austerity path, cutting it off from its financial lifeline and endangering its place in the euro.

"I'm hopeful but also scared," said 36-year-old Sofia Tsaliki, an office clerk. "New elections won't bring anything, but at least we are giving a message to the politicians and Europeans that they need to take proper notice and cannot ignore us any more."

After taking the largest share of votes, Samaras gets first shot at forming a government. With PASOK beaten into third place, the two must woo one of five parties opposed to Greece's latest bailout package if they are to renew their alliance.

Greece faces an acid test next month when it must give parliamentary approval for over 11 billion euros in extra spending cuts for 2013 and 2014 in exchange for more aid from the European Union and International Monetary Fund.

That looks like a tough task even if a new government can be formed in time. Several analysts said the unprecedented fragmentation of the vote could mean weeks of instability and force another election.

Othon Anastasakis, director of southeast European studies at Oxford University told Reuters: "Greeks are sending a very strong message abroad, which is enough with austerity."