Portugal set for right-wing deal

Barosso leaves the presidential palace on Thursday after being invited to take power

LISBON, Portugal -- Social Democrat leader Jose Manuel Durao Barroso has been formally named as Portugal's prime minister and asked to form a government.

Barroso, who failed to win an overall majority in last weekend's election, is set to enter negotiations with the right-wing Popular Party to form a government by April.

The former foreign minister was asked by President Jorge Sampaio to form a government on Thursday.

The centre-right Social Democrats narrowly ousted the incumbent Socialist party by 40.12 percent of the votes compared to 37.85 percent -- returning to power after a six year absence.

But their 102 seats fell short of a majority in the 230-seat parliament. An agreement with the Popular Party, which came a distant third with 14 seats, would give them 116 seats.

Barroso was reported by Reuters as saying: "I believe that it is necessary that the next government have the widest possible support, and that is what I am going to do."

He did not give details about what kind of agreement he hoped to reach with the Popular Party, such as a coalition government.

Barroso, 45, was elected on a manifesto focusing on the flagging economy.

The new leader has backed a "fiscal shock" of corporate and income tax cuts and lower government spending to attract investment and boost growth in the nation of 10 million people.

Paulo Portas, the Popular Party leader, has had a prickly relationship with the Social Democrats.

He was a sharp critic of Social Democrat Prime Minister Anibal Cavaco Silva in the early 1990s while editor of the Independente newspaper.

Portugal's election was held early because Antonio Guterres resigned as premier in December after a sweeping victory by Social Democrats in local elections.