Ukraine's liberals talk of coalition after poll

KIEV, Mar 27 (Reuters) Ukraine's pro-Western liberals readied today for coalition talks after former Prime Minister Yulia Tymoshenko urged them to close ranks to keep out a Russia-backed party after yesterday's parliamentary election.

Tymoshenko, speaking after exit polls showed her bloc was in second place, said yesterday a deal on a coalition government drawn from the liberal parties of the 2004 ''Orange Revolution'' was ''practically ready''.

Voter disillusionment over an economic slowdown and splits among the liberals since they were thrust into power by street protests helped Viktor Yanukovich's pro-Russia Regions Party win the largest share of the vote.

Yanukovich, strong in Russian-speaking eastern Ukraine, seized on his big win to also invite parties to join a coalition.

But exit polls showed the liberals, who have set the former Soviet republic of 47 million on a course to join the European mainstream, could still control parliament and frustrate his comeback.

Before yesterday's vote, political pundits had forseen the prospect of President Viktor Yushchenko, who is backed by Our Ukraine, having to form a coalition with Yanukovich whom he humiliated in a re-run of a disputed presidential poll in 2004.

But Yushchenko, whose party was running third in the parliamentary election, now has to patch up differences with Tymoshenko, his close comrade in the Orange Revolution whom he sacked as prime minister last September.

There was no immediate word from Yushchenko's camp.

Tymoshenko's strong showing was the result of relentless campaigning by the glamorous and persuasive 45-year-old, whose sharp tongue proved a scourge for both Yanukovich and her old patron, Yushchenko, alike on the stump.

Preliminary talks between the liberals -- Tymoshenko's bloc, Our Ukraine party and the Socialists -- were scheduled for 1100 hrs today.

If they do form a coalition, the poll outcome will put the Orange Revolution leaders under pressure to deliver on reforms after prising Ukraine from centuries of Russian domination.

The exit polls gave Yanukovich's Regions Party 27-31 per cent, the Yulia Tymoshenko Bloc 22-24 per cent and Our Ukraine about 15 per cent. Preliminary results were not expected for two or three days.

The poll outcome was a double humiliation for Yushchenko, who beat Yanukovich in a presidential poll re-run after the December 2004 street protests but then fell out with Tymoshenko.

ORANGE STANDARD BEARER Tymoshenko's success effectively meant she took over as standard-bearer of the ''Orange'' liberals from Yushchenko.

In her familiar braided hairstyle, she told a late-night news conference that three liberal parties -- her own bloc, Our Ukraine and the Socialists -- had won enough votes to form a majority government.

She implied she would be back as Prime Minister to head the coalition -- a shot aimed at Yushchenko, who axed her from the job after infighting in 'orange' ranks over corruption charges.

''I received very kind words from Roman Bezsmertny, the head of the Our Ukraine campaign staff, who said the bloc that I head had won the election and should take responsibility for matters.

We will take that responsibility,'' said Tymoshenko.

Yushchenko aides said the president also wanted a restored 'orange' team and that he could play a decisive role.

But allowing Tymoshenko to be Prime Minister will not be easy given her interventionist views and his free market style.

True to form, Tymoshenko played a strong populist card, saying she would scrap a New Year deal increasing the price of imported Russian gas. A standoff with Russia at the time triggered shortages in Europe and diplomatic uproar.

Ukraine's export-led economic growth has slowed markedly over the last year due to lower world prices for steel and chemicals, its major exports, and a lack of investment.

Foreign investors have expressed concern over uncertainty in privatisation policy, frequent rows in the government over major policy issues and failure to simplify an opaque legal system.

REUTERS SHB DS1255