Fire-shocked Greeks vote in cliffhanger election

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ATHENS, Sept 16 (Reuters) Greeks voted today in an election that could reflect public discontent with the big parties and transform smaller ones into powerbrokers.

Conservative Prime Minister Costas Karamanlis called the early vote, confident his economic record would secure an easy win. But a slow response to forest fires that killed 65 people this summer and a series of scandals have hurt his chances.

The election pits Karamanlis against socialist leader George Papandreou, both heirs to prominent political dynasties.

Opinion polls suggest neither may win an outright majority with voters defecting to smaller parties, such as the far-right LA.O.S., expected to enter parliament for the first time.

Polls opened nationwide at 7 am (0930 ist) with more than 9.8 million registered voters and 490,000 first-time voters.

Exit polls are expected immediately after voting ends at 7 pm ''We respect and trust citizens and take part in this democratic procedure with a smile and confidence,'' Karamanlis told reporters after voting in the northern city of Thessaloniki.

Opinion polls published before a Sept 1 blackout showed the conservative New Democracy party leading the socialist PASOK by one to two percentage points and neither had enough votes to form a government. More than 10 per cent were undecided.

''These are muted elections because everyone is shocked by the fires,'' said Nikos Fotis, a 77-year-old pensioner in the western Greek village of Athamanion.

LEADERS VOTE Karamanlis, nephew of the late statesman Constantine Karamanlis, scored a landslide victory in 2004 against Papandreou, son of the late Prime Minister Andreas Papandreou.

''A new day is dawning for Greece, a day of optimism,'' a smiling Papandreou said after also voting in Thessaloniki.

Papandreou has not ruled out cooperating with other parties but Karamanlis has said he would rather call a new election than form an uneasy coalition, in a move analysts said was aimed at stopping voters from defecting to the LA OS party.

''Today, the Greek democracy reveals its virtues, contrary to blackmail and pressure,'' LA OS leader George Karatzaferis told reporters after casting his ballot.

If the vote is undecided and attempts for a coalition fail, Greece faces new elections. That could delay reforms, including shoring up an ailing pensions system which could go bust in 15 years, economic analysts say.

Karamanlis prides himself on cutting deficits and creating 200,000 jobs since 2004 but unemployment is still above the EU average despite a healthy 4.4 per cent GDP growth rate this year.

PASOK favours pro-market policies with strong social protection, promising tax breaks, increased pensions and spending 5 per cent of GDP on education, up from 3.6 per cent now.

About 20 percent of Greeks live below the poverty line and per capita GDP is the lowest next to Portugal's in the euro zone. Brussels says more structural reforms are necessary.

''We gave the government a chance but their promises have not been fulfilled and we need someone whom we can believe,'' said Vassilis Sirakoulis, 34, a factory worker in the central Greek city of Larisa.

REUTERS SYU RK1618

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