CHINA looks on as the new leftist Greek government scuppers the privatisation deal worked out with Hong Kong's Cosco Pacific by the previous government for the next phase of the Port of Piraeus near Athens.

"We urge the Greek government to protect the legitimate interests of Chinese companies in Greece, including those of Cosco," said Shen Danyang, the spokesman for China's Ministry of Commerce.

"We will not sell a majority stake in Piraeus port," said Thodoris Dritsas, a member of Parliament for the port city. Dritsas has been appointed deputy minister in charge of shipping.

Shares in OLP, the Piraeus Port Authority, fell 6.6 per cent on the Athens Stock Exchange following the government's decision, although the ruling Syriza Party had said it would keep the port in the state's hands during the election campaign.

"The Cosco deal will be reviewed to the benefit of the Greek people," Dritsas told Reuters, in a reference to the Chinese company that is one of five short listed bidders for the state's 67 percent stake in the port authority.

Cosco Pacific, China Cosco Group's port operator, is the front runner in the bidding as it signed a 35-year concession to operate two of the port's three container quays in 2009, resulting in a sharp rise in traffic.

The other bidders are Maersk's APM Terminals, Ports America, International Container Terminals of the Philippines and Utilico Emerging Markets, a Bermuda-based closed-end investment company.

The ruling Syriza Party's decision to pull the privatisation of the port comes just a week after Cosco Pacific began the EUR230 million (US$260 million) construction of a third container quay to boost the port's annual capacity to more than six million TEU.

The new Greek government also plans to reinstate public sector employees judged to have been laid off unfairly.

Greek bank stocks fell 26 per cent this week, taking their cumulative losses since the national election to more than 40 per cent, Reuters reported, adding that Standard and Poor's cut its Greek sovereign debt outlook from stable to negative.

Leftist Prime Minister Alexis Tsipras said his government would pursue balanced budgets, but not "unrealistic surpluses" to pay massive public debt of more than 175 per cent of GDP.

Mr Tsipras was congratulated by US President Barack Obama for his election victory.