After weeks of political uncertainty, Greek's pro-euro parties have agreed a coalition, intent on renegotiating the terms of an international bailout that has fuelled social tensions in the country.

The conservative New Democracy party and socialist PASOK party have agreed an uneasy alliance, determined to fight against austerity.

Party leaders said a team would be formed to renegotiate the terms of the 130 billion euro bailout, a contraversial move for Greece's European partners who say they will adjust but not re-write the document.

Europe's debt crisis began in Greece. Two and a half years and four bailouts later - two of them for Greece - there is no end in sight.

"Our efforts have yielded a parliamentary majority to form a durable government which will bring hope and stability," New Democracy leader Antonis Samaras told President Karolos Papoulias, three days after he narrowly won Sunday's election.

PASOK leader Evangelos Venizelos warned of a "big battle" in Brussels to craft a new deal that would promote growth and contain unemployment: "The most critical issue is the formation of the national negotiation team and ensuring that it is successful," he told reporters.

PASOK will back the government in parliament but there was no word on who would serve in the new cabinet.

Meanwhile New Democracy leader Antonis Samaras has been officially sworn in as the new Greek Prime Minister.