Former Greek PM Papandreou eyes SYRIZA alliance in comeback

By Lefteris Papadimas & Deepa Babington

Former Greek Prime Minister George Papandreou says his newly-formed party is open to an alliance with election frontrunner SYRIZA as long as it agrees to hold a referendum on reform policies after Sunday's election.

Sidelined since being ousted as premier in 2011, the third-generation scion of Greece's most prominent political dynasty is attempting a comeback after splitting three weeks ago from the PASOK party founded by his father Andreas four decades ago.

The fledgling party is being closely watched as a wild card that will splinter the leftist vote in the Jan. 25 election and play a role in shaping the post-electoral landscape if it crosses the 3 percent share of vote hurdle to enter parliament.

With a firmly pro-euro and pro-reforms platform, Papandreou could be a moderating influence on SYRIZA, whose radical leftist rhetoric and pledge to overturn reforms has spooked investors.

SYRIZA leader Alexis Tsipras has ruled out alliances with anyone apart from the Communist party, but analysts expect him to soften that stance if he fails to win outright.

Most polls show Papandreou's "Movement of Democratic Socialists" just below the threshold to enter parliament, but the former premier said he was confident it would get in.

His aim, he said was to shift the debate in Greece away from a narrow focus on support or opposition to its tough bailout program. "It's not about the deeper issues we have in our country or the changes we need to make and I want to bring that back in the debate," he told Reuters in an interview on Monday.

He ruled out an alliance with the ruling New Democracy party, saying Prime Minister Antonis Samaras -- his roommate in the early 1970s at Boston's...