Greece's radical new leader Alexis Tsipras plots course to tear up bailout deal

Radical left leader Alexis Tsipras failed last night in his effort to form an anti-bailout coalition in Greece, as European leaders debated withholding loan payments in response to political posturing in Athens. A final effort to agree a unity government from pro-European parties gets underway today with little likelihood of success, an outcome that would send Greeks back to the polls.

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After discussions about postponing the latest tranche of aid to Athens from the European Financial Stability Fund, eurozone finance ministers approved the release of €4.2bn last night. But as concerns mounted over Greek leftists' statements that the country should renege on its debts, they said the final €1bn of the payment would be held back, as it was "not needed before June and will be disbursed depending on the financing needs of Greece".

The German Foreign Minister, Guido Westerwelle, had earlier insisted Greece would receive no more aid unless it continued to enact the agreed economic reforms and acknowledged that it could end up leaving the eurozone if it failed to comply. "Germany would like to keep Greece in the eurozone, but whether Greece remains in the eurozone or not lies in its own hands," he said.

However, some officials close to the discussions said talk of holding the money back was being used to pressurise the Greeks to back the bailout, rather than being treated as a serious option.

Evangleos Venizelos, leader of the tainted socialist party, Pasok, will now lead a last-ditch effort to form a parliamentary majority out of Greece's fragmented election result. Mr Venizelos, finance minister in the previous coalition, knows better than most how likely Athens is to wring concessions from its lenders and has appealed for Greece to honour the commitments it made in return for two multibillion euro bailouts.

The more likely outcome is that Greece's fractured right-wing will try to unite against Mr Tsipras and his Radical Left Coalition (Syriza) ahead of fresh elections expected on 17 June. Conservative leader Antonis Samaras, whose New Democracy party led Sunday's poll by a narrow margin from Syriza, has already failed to find coalition partners.

Mr Samaras warned yesterday that the Syriza leader's stance would "lead to immediate internal collapse and international bankruptcy, with the inevitable exit from Europe". Mr Samaras has been punished for criticising the bailout while in opposition before signing up to it after joining the unity government. During the election campaign he attempted to please both sides by promising to amend Greece's deal with creditors.

Mr Tsipras has appealed to Greeks by denouncing the bailout terms as tantamount to "occupation" and promising to tear them up while keeping the country in the euro as leader of a European anti-austerity movement.

Mr Samaras hit out at attempts to build a broad "anti-European" front by his opponents. "The Greek people have not given a mandate to destroy the country, nor to leave the euro," he said.

Earlier in the day, the leader of the right-wing splinter group, Independent Greeks, sounded the death knell for efforts to agree a coalition based on opposition to the "memorandum" – the package of reforms agreed in return for international loans. "There is not a sufficient majority to form an anti-memorandum front," said Panos Kammenos, whose party came fourth in Sunday's elections.

Greece's electoral system awards a 50-seat bonus to the leading party, which means no coalition is possible without Mr Samaras' conservatives, but anti-bailout parties may calculate that the rancorous mood in Greece will see them make further gains in a fresh vote. The Syriza leader's rhetoric about "another Europe" has been received well in a country where unemployment has risen by one million since the previous election, and salaries have been slashed.

Mr Tsipras has used his time in the spotlight to position his party as the home of Greece's disaffected voters. As well as meetings with political heavyweights, he also reached out to an environmental party which failed to make it into parliament. Calls from economists at Syriza to nationalise banks, audit Greece's international debt and place a moratorium on debt repayments have riled international markets. On social media sites, Greeks have begun to set up groups to discuss preparatory measures for an abrupt exit from the euro.

Mr Tsipras, 38, a vocal critic of police brutality, has been criticised for giving moral support to the anarchists, who are blamed for violent confrontations with authorities. Off-camera he speaks of himself as the new Andreas Papandreou, the socialist leader whose expansion of the state is blamed by many for its eventual bankruptcy. He is now seeking to position Syriza as the new home for Greece's public-sector workers, who feel betrayed by Pasok, and believes that a new election would establish his party as the main voice of the country's left.

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