The Greek Prime Minister, Costas Karamanlis, conceded defeat last night and resigned as leader of the conservative party after a general election victory for the opposition Socialists.

With more than 80 per cent of votes counted the Panhellenic Socialist Movement (Pasok) of George Papandreou had 44 per cent against 34 per cent for the New Democracy of Mr Karamanlis. Turnout was 70 per cent. Pasok needs to win at least 151 of the 300 seats in parliament to form a government on its own. An electoral monitoring branch of the Interior Ministry projected that Pasok would win 160 seats.

If Mr Papandreou wins the majority he will be the third Prime Minister in his family, after his father Andreas and grandfather George. Though lacking in the Papandreou charisma, he forged ahead by promising to ease economic discomfort. He has campaigned for a “green growth” economic model involving investment in renewable energy.

Abstentions were notable among younger people leading to concern that the internet generation could be turning against politicians and considering direct action, as in the riots in Athens last December which led to the creation of violent extremist groups. One of them, named the Nuclei of Fire, is believed to have placed a bomb that went off near Mr Karamanlis’s final rally in Athens on Friday. No one was hurt.

The election result was a personal as well as political defeat for Mr Karamanlis, who had campaigned on a promise of tough financial remedies, including a freeze on salaries and pensions for at least a year. Mr Papandreou, by contrast, made feel-good promises but refused to say how they would be paid for.

Mr Karamanliscalled the snap election last month while he was halfway through his second term and at least six points behind Pasok. Greece is under mounting pressure from the European Commission to put its finances in order. It has a public debt of nearly 109 per cent of GDP, the highest in the EU besides Italy.

Mr Papandreou will be hard-pressed to meet his promises of salary and pension rises. His party has also pledged to cut retail prices by 10 per cent in the first 100 days.

The hardline Greek Communist party, the KKE, was expected to get 8 per cent of the vote, and a newly emerging force, the Ecologists, were poised to break the 3 per cent barrier for representation in the Vouli (parliament). George Karatzaferis, the leader of the right-wing Popular Orthodox Rally (LAOS), was expected to garner 6 per cent of the vote.

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