ATHENS (Reuters) - Greece's radical leftist Syriza rode a wave of anti-austerity anger to win the country's EU election but failed to deliver a knockout blow against Prime Minister Antonis Samaras's government, the official projection showed on Sunday.
In his first electoral test since coming to power two years ago, voters punished Samaras for harsh wage and pension cuts imposed at the behest of EU/IMF lenders bankrolling Greece.
It was the first time a radical leftist party had won at a national level in modern Greece, though Syriza fell short of a five percentage point victory margin seen as jeopardizing a government clinging to a two-seat majority in parliament.
"Europeans are celebrating the defeat of the bailout and austerity in the country the European leadership turned into the guinea pig of the crisis," Syriza leader Alexis Tsipras said, reiterating a call for early elections.
"Democracy and respect for democracy demands seeking the popular verdict as soon as possible."
The official projection by the interior ministry showed the anti-bailout leftists winning by nearly four points with 26.7 percent of the vote, ahead of Samaras's New Democracy conservatives who were projected to take 22.8 percent.
"Government instability is not an issue despite the four percentage point gap," said Theodore Couloumbis of the Athens-based think tank ELIAMEP. "As a referendum on whether the government should stay or go, the answer given today was that the government should stay until further notice."
In a further boost for the government, which backs a deeply unpopular EU/IMF bailout tied to austerity measures, the co-ruling Socialist PASOK confounded predictions of a meltdown and looked set to secure a respectable 8.1 percent of the vote.
The two co-ruling parties managed a bigger combined share of the vote than Syriza, which analysts said averted the possibility of early elections for now.
"Two years ago, with your mandate we averted the worst for Greece. Today we averted the nightmare: going back to the ordeal we went through and which we are overcoming," Samaras said in a televised statement.
In an apparent election night prank, the fountain at the central Athens Syntagma square in front of parliament spewed bubbly foam across much of the square after soap was poured in.
FAR RIGHT SURGES
Syriza, which moved from the political fringes to become the main opposition in 2012 on a fiercely anti-austerity message, declared victory and said the results were a sign that the party was here to stay.
Syriza had sought to cast the EU vote as a referendum on Samaras's government, which in turn had urged Greeks to stay on the path of stability and promised that a long-awaited recovery from a six-year recession was taking root, pointing to the country's first bond sale in four years last month.
Much of Syriza's appeal has come from promising to reverse wage and pension cuts which has resonated in a country with unemployment over 26 percent.
"I voted for an opposition party because I wanted to send a message against austerity - to show that people in Greece oppose austerity," said Dimitris Koukos, 40, a lawyer.
Golden Dawn, the far-right party that denies accusations that it is a neo-Nazi criminal gang also surged on the back of voter anger. It was set to cement its place as Greece's third most popular party despite a government-led crackdown that has landed its leader and top lawmakers in jail pending trial.
Voters ignored an array of charges ranging from murder to extortion against party members to give it 9.3 percent of the vote, which would allow it to enter the European Parliament for the first time.
"We will continue our political struggle ... and we will score even higher in the next election," Golden Dawn spokesman Ilias Kasidiaris said.
In local election runoffs that were held simultaneously, the government-backed incumbent beat Syriza's candidate to win the symbolically important Athens mayor race.
Early results showed Syriza and the government-backed incumbent tied in the race for governor of the wider Athens region, which is home to a third of the population.
Earlier on Sunday, Greece's anti-terrorism squad was called in after an apparent attack at the headquarters of the co-ruling PASOK party after two bullets pierced its windows, police said.
(Additional reporting by George Georgiopoulos, Harry Papachristou and Karolina Tagaris. Writing by Deepa Babington, editing by Mike Peacock)