Ukraine's Tymoshenko says aims to form new govt

KIEV (Reuters) - Yulia Tymoshenko, one of the leaders of Ukraine's "Orange Revolution," said on Tuesday she and her allies had won enough seats in a parliamentary election to oust the prime minister and form a new liberal government.

Tymoshenko, herself a former prime minister, spoke after meeting President Viktor Yushchenko. "Orange Revolution" parties clung to a slight lead over those linked to Prime Minister Viktor Yanukovich as counting drew to a close.

The prime minister, back in office after rebounding from defeat by Yushchenko in the 2004 uprising, has also claimed victory in the weekend poll.

The tight finish has dashed hopes the contest would resolve a power struggle pitting president against prime minister in the former Soviet country of 47 million.

Each side claims the right to form a coalition in the 450-seat assembly on the basis of Sunday's voting. Long talks are likely to follow.

"We have no doubts we will have a majority in parliament," Tymoshenko said of her talks with the president, with whom she has formed a new alliance after a period of estrangement.

"We agreed that after the Central Election Commission declares the preliminary results, we will begin at once forming a government and all other bodies of executive power."

With 98.1 percent of the vote counted, the prime minister's Regions Party remained in first place with 34.2 percent of the vote. Its Communist party ally had a further 5.4 percent.

But they were outscored by the combined "orange" tally. Tymoshenko's bloc had 30.9 percent, bolstered by a further 14.3 percent for the Our Ukraine party, which supports Yushchenko.

A centrist party, the bloc of former parliament speaker Volodymyr Lytvyn, cleared the 3 percent barrier to win seats. But the Socialists, part of Yanukovich's outgoing government coalition, were just short.

THIN MAJORITY

Differences in orientation towards the West and Russia, key issues in 2004, have faded into the background.

Yanukovich, backed then by Russia, now describes himself as pro-European and debate centers mainly on how to improve the living standards of Ukrainians earning on average $260 a month.

One election commission member, Zhanna Usenko-Chorna, said the outstanding votes would change little. "If all goes ahead without any interference, the trends will hold and there will be no significant change in the result," she told Reuters.

A source in the presidential secretariat said Yushchenko had "no hesitation" in endorsing Tymoshenko as premier at the head of an "orange" coalition once final results were proclaimed.

But the source added that the president "would not object if the coalition proposed a position in government to some person from the Regions Party or from the Lytvyn bloc."

Lytvyn has said nothing so far about which side he might favor. Tymoshenko said "orange" groups did not need Lytvyn's support, but would not oppose talks with him.

She also said a threat by Russian gas giant Gazprom to cut supplies unless Ukraine paid $1.3 billion in debt arrears exposed shady government dealings. Russia briefly cut off gas to its western neighbor in early 2006 in a price dispute.

"This is a record debt and we will deal with those who will be held criminally responsible for it," she said.

Tymoshenko said she and Yushchenko had discussed "ways of preventing large-scale fraud" that "orange" leaders say sought to help the Socialists clear 3 percent and re-enter parliament.

On Monday, Yushchenko ordered an investigation into delays in the count in areas loyal to the prime minister.

Poll rigging played a major role in the 2004 presidential election in which Yushchenko beat Yanukovich after weeks of mass rallies against fraud by protesters clad in orange.

Tymoshenko became the president's first prime minister, but the two fell out and she was sacked.

(Additional reporting by Sabina Zawadzki)