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Papandreou to reshuffle cabinet

Greece's prime minister has announced plans to reshuffle his cabinet and seek a vote of confidence for his new government this week, after coalition talks with opposition parties failed.

George Papandreou's announcement came after hours of negotiations on a day when central Athens was rocked once more by anti-austerity riots and the debt-ridden country came under massive pressure from markets.

Mr Papandreou has been struggling to ensure parliamentary approval for a crucial austerity Bill.

"The country is facing critical times," he said. "Today I made new proposals to the leaders of all parties to achieve the necessary national consensus. I clarified that my responsibility has no dependence on official posts."

Opposition party officials had called for Mr Papandreou's resignation as a condition for any coalition deal.

"Before the meaningful issues were negotiated, conditions were made public that could not be accepted," Mr Papandreou said, adding that they would have kept "the country in a lingering state of instability and introversion, while the vital national issue remains dealing with the national debt".

The emergency talks began as riot police clashed with thousands of youths in the main square outside the parliament.

Police fired repeated volleys of tear gas to repel rioters hurling fire-bombs and ripped-up paving stones. A crowd of youths smashed the windows of a luxury hotel in the square. More than 60 people were injured, including 36 police.

Mr Papandreou has been struggling against falling approval ratings and an internal party revolt among the governing Socialists over a new package of austerity measures.

He saw his majority in the 300-seat parliament reduced to five on Tuesday after one of his deputies rebelled and declared himself an independent. Another deputy has said he will not vote for the austerity package. But the measures must be passed by parliament before the end of the month if debt-ridden Greece is to continue receiving funding from its international bailout.

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