"New Democracy has won the elections. I wish Karamanlis success in his work for the good of Greece," Papandreou, head of the Pan Hellenic Socialist Movement (PASOK) said in a speech congratulating New Democracy leader Costas Karamanlis on what exit polls said was a win by about 5%. 

The loss ended 11 years of socialist rule and left New Democracy with the massive task of getting back on track ailing preparations for this August's Olympic Games as well as taking a decision on the Cyprus peace talks. 

"For us the Cyprus problem is of the utmost importance. It is
going through a difficult phase. We will also continue to support the major issue of the Olympic Games," Papandreou said. 

'New beginning'

"The result for me is a new beginning. In this effort for a new beginning, I call on all Greeks to participate." 

Karamanlis, a nephew of a former conservative prime minister who led the country out of military dictatorship in 1974, will be Greece's first leader born after World War Two and the bitter 1946-49 civil war between conservatives and communists that followed. 

"This is an intensely anti-PASOK vote and not so much one in favour of New Democracy," pollster Andreas Panagopoulos told Reuters. "We see a high percentage of PASOK voters turning to New Democracy." 

"For us the Cyprus problem is of the utmost importance. It is
going through a difficult phase. We will also continue to support the major issue of the Olympic Games."

George Papandreou,
Greece's governing socialist leader

The main choice of the election was between the inheritors of two family political dynasties which have dominated modern Greek politics. 

New Democracy

On the right was Karamanlis, nephew of the former prime minister who restored democracy to Greece after seven years of military rule. 

On the left was PASOK leader Papandreou, grandson and son of former prime ministers, who failed in a bid to win the party's fourth consecutive election since 1993. 

In the 2000 election, PASOK won 158 seats in the 300-member parliament. New Democracy, under Karamanlis, took 125. "At this early stage it looks like New Democracy could get about 170 seats. Pasok could get less than 120 seats," Metron Analysis pollster Stratos Fanaras told Antenna TV.