A Greek court has ordered the state broadcaster ERT back on air while it is restructured, allowing squabbling leaders of the governing coalition to move towards a compromise that avoids early elections.

The top administrative court appeared to vindicate Samaras's stance that a leaner, cheaper public broadcaster must be set up but also allowed for ERT's immediate reopening as his two coalition partners had demanded, offering all three a way out of an impasse that had raised the spectre of a snap election.

The Greek government shut down last week the radio and TV services of the state broadcaster ERT and suspended all employees as part of its latest austerity measures.

"ERT is a case of an exceptional lack of transparency and incredible extravagance. This ends now," government spokesman Simos Kedikoglou said earlier.

In his words the public broadcaster ERT, was a real "haven of waste".

While all 2,500 employees were to be sacked in the latest move in rafts of spending cuts and tax rises aimed at leading the country out of recession.

The decision took viewers by surprise as they saw the screens go to black late on Tuesday evening.

The head of ERT's foreign desk, Odin Linardatou, said the announcement took journalists by surprise too.

"We are very shocked, we are angry," she told the BBC's Newshour programme. "What I cannot accept in a democracy is that Greece will not have a public broadcaster."

Thousands of people held protests against the decision outside ERT headquarters.