Greece's conservative Prime Minister Costas Karamanlis won a second four-year term with a diminished majority in parliament, results show after most of the ballots were counted, CNN reported.

With 85% of the votes counted, Karamanlis' New Democracy party was ahead with 42.6%, while its socialist rival PASOK, led by George Papandreou, had 38.4%.

The communist KKE party won 7.6 % of the vote and the SYRIZA left-wing coalition got 4.6%.

The far-right LAOS party appeared to have won just above the 3 percent threshold needed to be represented.

Both New Democracy party and PASOK appeared to have lost some support following the fires and a financial scandal in which state pension funds bought bonds at inflated prices.

Sunday's results showed New Democracy was likely to win 155 of the 300 seats in parliament, compared to 165 in the outgoing legislature.

"Thank you for your trust. You have spoken loud and clear and chosen the course the country will take in the next few years," Karamanlis said as thousands of party supporters thronged the streets of central Athens Sunday evening.

"The people have chosen and their decision is respected. PASOK fought hard but it did not succeed. People sensed that the poor state of public administration, with the scandals and fires, had deeper causes," the opposition's leader said.

The Papandreou and Karamanlis families have dominated the Greek political scene for most of the past 50 years.

About 9.8 million people out of a population of 11.4 million were eligible to vote.