Shimon Peres, the elder statesman of Israeli politics, today quit the Labour Party he joined 60 years ago and threw in his lot with long-time rival Ariel Sharon.

The former prime minister and Nobel peace laureate, who has held every major Cabinet position, was ousted as Labour leader three weeks ago by the trade unionist Amir Peretz. This evening Mr Peres said he had decided to support Mr Sharon in the interests of a lasting peace with the Palestinians.

“It was not easy, but I made the choice and decided,” he said. “I don’t believe that it is possible to push forward the peace process in the current political constellation. I believe the most qualified person for this is Ariel Sharon, he will restart the peace process right after the election.... I decided to join him and work with him.”

Advisers to Mr Sharon’s new Kadima party said that Mr Peres was unlikely to actually join the party, but would publicly endorse it.

A heavyweight partnership between the on-off rivals who have dominated the Israel's political scene for decades is seen as having the clout to defeat the Likud and Labour parties in elections scheduled for March 28.

It was through the support of the Labour Party under Mr Peres that Mr Sharon was able to complete the controversial withdrawal of Jewish settlers from Gaza.

Mr Peres, 82, who returned to Israel today after attending an Israeli-Palestinian football match for peace in Barcelona, signalled his support for Mr Sharon in an interview with the country’s best-selling newspaper Yediot Aharonot, which was published this morning.

"It matters not to whom you belong but where you are going. You have to lead the country to peace. On that matter, I think Sharon is taking the right step," he told the newspaper.

In return for endorsing Mr Sharon, Mr Peres is likely to be appointed head of efforts to develop the depressed Galilee and Zegev regions.

The scene was set for the latest drama in Israeli politics in early November when union leader Amir Peretz ousted Mr Peres as Labour Party chief. Two weeks later, Mr Sharon, 77, announced he was quitting the hardline Likud Party he helped found three decades ago and was forming the moderate Kadima.

In a poll published in Yediot Ahronot, Kadima won 34 seats in the 120-member parliament, up one from a survey last week. Likud, which dominated Israeli politics for three decades, dropped from 40 to 10 seats, making it the fourth largest party.

"Sharon blitzed the Likud," political analyst Hanan Crystal said on Israel Radio. "He took one-third of the party members and most Likud voters."

Mr Sharon’s new allies have said that the prime minister, if re-elected, would strive to draw Israel’s final borders and wrap up a peace agreement with the Palestinians in his third term. However, they have also said that Israel wants to keep all of Jerusalem and the areas of the West Bank with large Jewish settlements - an offer the Palestinians are likely to reject.

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