But the nation remained mired in political, social and economic turmoil and Papandreou signalled he would stand down, calling for a new coalition to ram the EUR 130 billion bailout deal through Parliament and avoid the nation going bankrupt.
Papandreou's socialist government won with 153 votes in the 300 member Parliament, and a rebellion by some dissidents in his PASOK party failed to materialise after he indicated that his term as Prime Minister was close to an end.
"The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession," he told Parliament before the vote.
Papandreou said the new coalition government should secure the approval of the eurozone bailout deal, the nation's last financial lifeline, which is also the eurozone's central plank to prevent economic crisis devastating the bloc's bigger economies.
The leaders of France and Germany told Papandreou earlier this week that Greece would not get one more cent of EU aid if it failed to approve the bailout, meaning that the state would run out of money in December.
Papandreou told Parliament that he would go to the Greek President on Saturday to discuss formation of a broader-based government that would secure the eurozone bailout, adding that he was willing to discuss who would head a new administration.
The meeting will take place at noon
Papandreou dismissed demands for rapid elections as championed by the opposition. "Elections at this moment not only equal disaster but could not take place in the best interest of the people," he said.
"There is one solution. To support the (EU bailout) deal with a multiparty approach, without elections, with a strong government."
International investors took fright, Greece's borrowing costs soared and Papandreou was forced to go cap in hand last year to the only bodies still willing to lend at affordable rates -- the European Union and IMF.
In return they demanded wave after wave of spending cuts, tax rises and pension cuts which provoked widespread protests on the streets on Greek cities, with bloody clashes between demonstrators and riot police in Athens.
On financial markets, analysts said Papandreou's victory had been Pyrrhic, and many ordinary Greeks said they were disenchanted with Byzantine political wrangling that was not addressing their basic shortage of jobs and cash.
Sources said Finance Minister Evangelos Venizelos has won the backing of leaders of some smaller parties to support a new coalition that he would head. The new government would call early elections in a few months after the bailout had been secured, sources close to the deal said.
The leaders of the far-right LAOS party and another centre-right party indicated after Papandreou's speech that they would cooperate in a new coalition.
In Parliament, Venizelos said a new government should rule until next February and then call elections.
Opposition leader Antonis Samaras counted his New Democracy party out of the coalition, saying Papandreou had spurned his call for a national unity government. "Mr Papandreou rejected our proposal. The only solution is elections," he said.
Papandreou provoked uproar at home and abroad on Monday when he announced a referendum on the bailout, agreed by euro zone leaders only last week.
Under heavy domestic and international pressure, he backed down on a vote which could well have rejected the deal, potentially sinking eurozone leaders' attempts to stop the debt crisis devastating economies such as Italy and Spain.
The government officially announced earlier on Friday that the referendum would not go ahead.
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