Osborne urges Greece responsibility
George Osborne has urged Greece's new leaders to act "responsibly" after anti-austerity party Syriza triumphed in elections.
The Chancellor said the party's promises to voters appeared "very difficult to deliver" and "incompatible with what the eurozone currently demands of its members".
He also warned that the uncertainty generated would have an impact on Britain.
Meanwhile, Prime Minister David Cameron said that the Greek result was a "warning sign" of possible economic turbulence to come, reinforcing his call for Britain to stick to the Government's economic plan.
Alexis Tsipras's Syriza won the poll, but fell just short of an overall majority. He has pledged to renegotiate Greece's 240 billion euro (£179 billion) international bailout deal, and reverse many of the reforms that creditors demanded in exchange for keeping Greece financially afloat since 2010.
That would potentially place the country on a collision course with Angela Merkel's Germany, Europe's largest economy.
Mr Osborne told the BBC Radio 4 Today programme he understood that Greeks were "looking for other answers" after years of economic suffering. But he insisted the election was a "not a defeat of austerity, it is a defeat of economic plans that do not work".
"Ultimately, this is just the latest chapter in the eurozone crisis - it increases economic uncertainty and it reminds the UK that we need to work through the economic plan," Mr Osborne said.
"I think the obligation on the eurozone is to come forward with an economic policy that delivers jobs and growth."
Mr Osborne, who is on a visit to Cornwall, said relying on spending more money to get out of difficulties was a "panacea, false hope".
"Ultimately, if you take at face value all the things that the new Greek government has promised, including new big increases in public expenditure, I think that is going to be very difficult to deliver and incompatible with what the eurozone currently demands of its members," he said.
"But I hope that both sides now act responsibly.
"Everyone has in the past looked over the precipice of Greek exit from the euro and pulled back. It is certainly in the UK's interest that we have stability, that we have proper dialogue here between members of the euro.
"But ultimately what the UK needs is a strong partner, and the institutions of the eurozone are not working well enough for the people of Europe, and that has an impact on us."
Answering questions following a speech on the economy in Hampshire, Mr Cameron said: "What the Greek elections show is we need to have an economic plan that works. What they were revolting against is economic failure, they couldn't see a secure future.
"It's a great contrast to what is happening here, our economy is much bigger than it was in the crash rather than much smaller and a country where we have much more people in work.
"What the Greek election will also show is that there are some warning signs in the global economy, including in the eurozone, less rapid growth from the developing economies. These point to the importance of sticking to our economic plan which we are delivering."
A triumphant Mr Tsipras told Greeks that his radical left party's win meant an end to "austerity and destruction".
"The Greek people have made history. Hope has made history," Mr Tsipras said in his victory speech at a conference hall in central Athens.
Mr Tsipras said his party's victory had made the "troika a thing of the past", referring to the three international institutions - the European Union, International Monetary Fund and European Central Bank - that have carried out inspections to monitor Greece's progress before approving each instalment of bailout funds.
"The verdict of the Greek people ends, beyond any doubt, the vicious circle of austerity in our country," Mr Tsipras said.
"The verdict of the Greek people, your verdict, annuls today in an indisputable fashion the bailout agreements of austerity and disaster.
"The verdict of the Greek people renders the troika a thing of the past for our common European framework. "
It is expected Mr Tsipras will meet the leader of the small Independent Greeks party later today "to confirm the support and possible participation of the Independent Greeks in the new government," according to a Syriza official.
Ukip leader Nigel Farage said: "This is a desperate cry for help from the Greek people, millions of whom have been impoverished by the euro experiment.
"An extraordinary game of poker will now begin with chancellor Merkel, with the European Central Bank powerless to do much than be an observer."
Labour's former Europe minister Peter Hain compared the measures imposed on the Greeks to the restrictions placed upon Germany after the First World War.
On Twitter he said: "Fantastic Syriza win: austerity does not work for Greece, for Tory/Lib Dem UK, nor for EU; we all need investment in growth not savage cuts."
Yanis Varoufakis, a Syriza MP tipped to become Greece's next finance minister, told Today that the country's austerity had been like "waterboarding".
But he insisted that a Greek exit from the euro was not "on the cards" and the party would not take a "confrontational" approach.
"There has been a bit of posturing on our side. What really matters now is that we sit down and discuss a way that the haircut to our debt - the debt writedown - is minimised," he said.
"Grexit is not on the cards, we are not going to Brussels or Frankfurt and Berlin in a confrontational style...
"To have this debt schedule, debt repayment schedule as we do at the moment, which is completely unrealistic and utterly disconnected from Greek growth, that is not good for them, it is not good for us.
"What we want to do is bind our repayments to our growth."
Labour leader Ed Miliband urged the Government not to "play politics" over the Greek result.
Mr Miliband said: "It is the responsibility of the British Government to work with the elected government for the good of Britain and Europe and not to play politics."
Downing Street underlined the need for the new Greek government to honour the country's international commitments.
"We want a Greece that is stable and committed to further reform, abiding by its international commitments and working with its EU partners," a No 10 spokeswoman said.
"We are clear that Greece needs to keep dealing with its deficit."
Roland Rudd, chairman of the Business for New Europe campaign for EU reform, said: "These election results mark a test for both the newly-elected Greek government and the EU.
"It is crucial that there is mutual respect during negotiations - the EU, European Central Bank and IMF must respect the Greek voters, but Syriza must compromise too. After all, three-quarters of Greek people want to remain in the euro, so the government will have to do what is necessary to make that happen."
Mr Miliband said: "Just like our elections are a matter for the people of this country, so who the Greek people elect is a decision for them.
"It is the responsibility of the British Government to work with the elected government of Greece for the good of Britain and Europe and not to play politics.
"And it is up to each country to choose its own path on how to deal with the economic and social challenges they face.
"We have set out our path for Britain: to make sure our country is fairer and more prosperous and balance the books."
Unite general secretary Len McCluskey said: "This stunning election victory is a tribute to the Greek people who have now firmly rejected the disastrous austerity policies imposed on them by the troika of the European Commission, European Central Bank and International Monetary Fund."
Mr McCluskey added: "The fight of the Greek people against austerity is the same fight that British, Irish and millions of other working people across Europe are waging against the failed politics that protects the rich and well-off at the expense of the poor.
"In voting for Syriza and an end to austerity the Greek people have once again made hope possible for millions of other people across Europe. Unite will watch with great interest the developments in other countries, such as Spain, where anti-austerity parties are also making huge gains, and Unite will continue to play its full part in fighting austerity to make another Europe possible."