Greek leader declares election victory

Conservative prime minister, Costas Karamanlis, declared victory in Greece's parliamentary election tonight, although official results showed he would have a slimmer majority in parliament.

"Thank you for your trust. You have spoken loud and clear and chosen the course the country will take in the next few years," Mr Karamanlis said as thousands of party supporters hit the streets of central Athens.

His statement came minutes after his rival, socialist party leader George Papandreou, conceded defeat.

Karamanlis overcame widespread anger over devastating forest fires that killed more than 65 people last month, and a challenge from a split in the right-wing vote to win a second four-year term.

Supporters in Athens were tonight honking horns, chanting slogans and waving blue New Democracy party flags.

Official results from nearly 66% of the total votes counted showed prime minister Costas Karamanlis' New Democracy party ahead with 43.3% and Pasok with 38.5%.

"The people have chosen and their decision is respected. Pasok fought hard but it did not succeed" said Papandreou, who heads the party founded by his father, former prime minister, Andreas Papandreou.