* New PM not yet agreed but Papademos tipped
* Venizelos should stay finance minister - opposition source
* New premier must control party chiefs
* Conservatives want technocrats in some major ministries
By Dina Kyriakidou and Lefteris Papadimas
ATHENS, Nov 7 (Reuters) - A former deputy head of the European Central Bank, Lucas Papademos, emerged on Monday as frontrunner to become Greece’s prime minister as party leaders bargained over who will lead a “100-day coalition” to push through a bailout before the country runs out of money.
Under EU pressure, an unaccustomed spirit of compromise seeped into Greek politics as the top parties haggled over the jobs in a government which will run Greece only until early elections in February.
A source at the opposition conservatives said they accepted socialist Finance Minister Evangelos Venizelos could stay in his job at a time of national crisis, but said nothing had been agreed yet on who should lead the unity government.
European Union leaders want Greece to form the coalition quickly and push the 130 billion-euro bailout through parliament, for the sake of a nearly bankrupt nation and to shore up confidence in the euro zone.
In Brussels, EU leaders kept up the pressure, saying Greece could get a delayed instalment of emergency funding this month from the EU and IMF — but only if the coalition gave a written commitment to the new bailout package.
“It is essential that the entire political class is now restoring the confidence that had been lost in the Greek commitment to the EU/IMF programme,” said EU Economic and Monetary Affairs Commissioner Olli Rehn.
Greece needs the 8 billion-euro instalment, part of an original rescue package pulled together last year, to meet heavy debt repayments next month and avoid defaulting. However, lenders have held back due to a series of disputes with Athens.
Even the United States weighed in, with the White House urging Greece to move as quickly as possible to fulfil its commitments under the rescue package, as speculators pounded euro zone bond markets.
By late evening the socialist PASOK party and conservative New Democracy had still not named a new prime minister, and the opposition source refused to comment on speculation that former ECB vice president Lucas Papademos would get the job.
Talks continued and the cabinet of outgoing Prime Minister George Papandreou was due to meet at 1000 GMT on Tuesday.
However, the source told Reuters that New Democracy was willing to let Venizelos stay. “The economic ministries, including finance minister Venizelos and his team, should stay for the sake of continuity,” said the source, giving the first indication of who would occupy any of the cabinet posts.
New Democracy would back the 2012 budget and a bond swap plan contained in the bailout package, under which the value of banks’ holdings of Greek government debt will be halved.
While the party would support the coalition, it wanted no cabinet seats itself, the source said. However, the socialists had to hand certain major ministries such as justice, defence and the interior over to non-party technocrats, he said.
Whoever leads the transitional government of national unity will have a monumental task in restoring order to a country whose chaotic economy and politics are shaking international faith in the entire euro project.
Despite the sealed lips on both sides, Papademos remained a possible frontrunner for premier. An aide said the Greek economist, who left the ECB last year, had arrived in Athens on Monday from the United States where he is a Harvard academic.
Outgoing Prime Minister George Papandreou has been in touch with Papademos, a senior government official told reporters. “The prime minister had several telephone contacts with Mr Papademos in the last days,” the official said.
Papademos oversaw the nation’s adoption of the euro in 2002 as Bank of Greece governor before moving to the ECB, and is a well-known figure in European capitals.
Another possible candidate emerged on Monday. European Ombudsman Nikiforos Diamandouros, who handles complaints against EU institutions, said he had been approached to become a possible candidate to lead the coalition and might be ready to “contribute” under certain conditions.
Greek media also raised a third possible candidate, the country’s envoy to the IMF, Panagiotis Roumeliotis, a former socialist economy minister.
Greeks worry that any new premier will struggle merely to get Papandreou’s socialist PASOK party and New Democracy to work together. “I’m afraid the new government will very soon turn out to be problematic,” conservative former finance minister Stefanos Manos told Reuters.
“The new prime minister will ... not give the impression that he is in charge. Everyone will be looking to the two party leaders who will be running things behind the scenes,” he said, adding: “The civil service won’t implement any decision and everyone will be waiting for the election.”
At least the two parties agreed on the likely lifespan of the coalition, deciding in the early hours of Monday morning that Feb. 19 would be the preferred date for an election.
Papandreou, who sealed his fate last week with a shortlived attempt to call a referendum on the bailout, will stand down when the new government takes over, under a deal sealed with New Democracy leader Antonis Samaras on Sunday.
Greeks have suffered immensely in the two years that Papandreou has run the country. International lenders have demanded wave after wave of pay and pension cuts, plus tax increases and job losses in return for emergency aid. This has helped to keep Greece in four successive years of recession.
The Communist PAME labour group will hold a rally in Athens on Nov. 10 to oppose a new government which it said “has the task to save the monopolies and crush the popular movement”.
“They want to vote through the new bailout... which will leave Greek people with their hands tied for many years.”
Greek bank shares , the country’s best benchmark of market sentiment with the government shut out of bond markets, rose 3 percent on the coalition deal.
A new coalition would be sworn in and hold a confidence vote within a week if all goes to plan, the government says.
Many Greeks remained sceptical about a coalition tasked with imposing more austerity to tackle a huge budget deficit.
“Hurrah, we are saved!” said plumber George Vihos sarcastically. “Why should we celebrate now that they will make sure we bear the pain?”
Papandreou had sought the referendum to show that harsh cuts demanded in the bailout had public support, but the risk that a “no” vote could bring about a sudden bankruptcy caused mayhem in markets, anger in Europe and rebellion in the ruling party.
He soon ditched the idea and won a confidence vote in parliament, but only after promising to make way for the national unity coalition.