World leaders ponder euro options
David Cameron will join world leaders meeting in Mexico to push for a long-term solution to Europe's economic turmoil after a "very bad crisis" was avoided when Greeks rejected anti-bailout proposals in crunch elections.
Right-wing New Democracy's victory was too narrow for it to form a government without support but the eurozone hailed the result as the basis for a new administration backing reforms leading to growth.
With 97% of ballots counted, anti-austerity party Syriza was defeated with 26.9% of the vote by New Democracy on 29.7%, with Pasok in third place at 12.3%.
Antonis Samaras, leader of the right-wing party, branded the result a "victory for all Europe" despite failing to secure enough votes to form a government. He said voters had shown they wanted to "stay anchored" in Europe and called for all political parties that shared that objective to form a coalition. The British coalition said it would work with "whatever Greek government is formed".
Former chancellor Norman Lamont said Syriza's failure at the ballot box had probably delayed a "very bad crisis" but warned "nothing underneath has changed very much".
Mr Lamont told Sky News: "I think there will be a certain amount of relief that what some people would see as the worst outcome has been avoided and you are not going to get confrontation between a Syriza-led government and the eurozone. But I think in reality nothing underneath has changed very much. Very few people believe Greece is in a tenable position for the long term but at least an immediate very bad crisis has probably been put off."
Leaders will meet in Mexico for the G20 summit of leading nations where the ramifications of the result are expected to be top of the agenda.
In a joint statement from Mexico, European Commission president Jose Manuel Barroso and European Council president Herman Van Rompuy welcomed the result and said the EU would now stand by Greece as eurozone and EU members. They insisted the current bailout deal for Greece - 130bn euro with strict national austerity conditions attached - remained the right way to restore the country's growth and prosperity.
Speaking during a visit to a community centre in Birmingham, Labour leader Ed Miliband said: "I think there is a real danger that after the Greek election results there is a sense of complacency - there is a sense that the international community can breathe a sigh of relief. The last thing we need is complacency and the last thing we need is an offer of more of the same. More of the same austerity is not going to work."
He added: "I am afraid what we hear from our Prime Minister today is simply more of the same. If I was the prime minister, I would be going to the G20 meeting of world leaders and saying there has got to be a decisive change of course towards jobs and growth."