Athens  - Faced with high unemployment, low budget revenues and a faltering economy, Socialist leader George Papandreou faces an uphill battle to pull the country from the brink of recession.

The elections, which pitted the heirs of two of the most powerful political dynasties, Papandreou against Conservative prime minister Costas Karamanlis, were seen as critical for implementing reforms needed in the Eurozone's second poorest member.

"We stand united, facing the big responsibility to change our country into a nation of justice, solidarity, humanity and green development," Papandreou told cheering supporters after partial results showed his party winning 44 per cent of the vote and 159 out of 300 parliament seats with 80 per cent of the vote counted.

Papandreou's surname may be reminiscent of old times, being the son and grandson of two former prime ministers. But in the five years he has headed the main opposition he has fought hard for the radical reform of the party.

With many Greeks sceptical of a party whose old guard had been tainted by allegations of scandals and complacency in the past, Papandreou is determined to bring transparency into Greek politics.

The Socialists will have to deal with a faltering economy after years of considerable growth, as well as high unemployment and a budget deficit exceeding 6 per cent of GDP.

Panagiotis Patrakis, an economist and professor at the University of Athens, said improving the state of public finances is the primary challenge of the next government, as is taking all necessary measures to inflate economic activity.

The Socialist PASOK party has promised a new approach to the economic crisis, promising a 3-billion-euro stimulus package, and proposing heavier taxing of the rich and helping the poor.

In contrast, conservative leader Costas Karamanlis had called for two years of tough reforms such as public sector wage freezes.

Poor state revenues forced the government to resort to borrowing 52 billion euros so far this year in order to finance a widening budget deficit, expected to exceed 8 per cent of gross domestic product.

Opinion polls over the past few months indicated Greeks had grown fed up with five years of conservative rule that began with high hopes to save the faltering economy but ended with cases of scandals and corruption.

"I feel like this is a new start - that finally we can bring this country forward like other countries in Europe," said 25-year-old hairdresser Georgia Papadaki.

Experts say attention will now be on whether Papandreou will appoint a new generation of talented younger economists and environmentalists to help run the country rather than the older generation of diehard socialists.

During his election campaign, Papandreou announced a 100-day plan to bring five draft bills to parliament, aimed at helping small business. He called for above-inflation pay rises and a reformed tax system that will put a heavier burden on the rich.

He also vowed to keep down the bureaucracy while he creates new ministries for the economy, the environment and citizens' protection. He said he would reduce the current 16 ministries to fewer than 15, including the new ministries, indicating his intention to consolidate other branches of government. (dpa)