Austria's Socialists have provoked a split in their own ranks and the wrath of their counterparts in Europe by forming a pact at provincial level with far-right strongman Joerg Haider.

Haider's Freedom Party stormed to a suprise election victory in the southern province of Carinthia on March 7 after polls predicted the centre-left Social Democrats (SPOe) would win.

The success is attributed to Carinthia's traditional conservatism and the charisma of Haider, support for whose party has plummeted since 2000 when it became part of Austria's ruling coalition.

The second political shock came last Saturday when Carinthia's Socialists formed a governing coalition with the FPOe, four years after they described Chancellor Wolfgang Schuessel's decision to form a national government with the FPOe as "a deal with the devil."

In making their own pact with Haider, they broke a policy decision taken in 1986 to sideline the hard-core nationalist who has schocked Europe with his xenophobic outbursts and praise for some Nazi policies.

Vienna's powerful Socialist mayor, Michael Hauepl, has called the decision "a grave mistake" while other party officials quit in protest.

The leader of Carinthia's Socialists, Peter Ambrozy, on Thursday said he had no choice but to negotiate with Haider and emphasized that the pact pertained only to regional politics.

Asked about the apparent shift in policy, Ambrozy denied that the two parties had ever radically diverged on core issues.

The SPOe's national leader, Alfred Gusenbauer, also hurried to point out that Carinthia was "an exceptional case" and had no bearing at national level where his party and the Greens are opposition partners.

Political analyst Anton Pelinka said while it is true that the province's constitution imposes proportional power sharing, Ambrozy never seriously negotiated with any of the other parties.

In siding with Haider, Ambrozy broke his election promises, Pelinka said.

"There are short term gains -- more power, more portfolios -- but in the long run there are clearly disadvantages," he told AFP.

Among these are the confusion that the SPOe has created for its supporters and the risk of pushing them towards the Greens.

"It poses a threat to the identity of the Social-Democrats," Pelinka said.

He predicted that "Gusenbauer will constantly have to defend his credibility in Brussels, Paris and Vienna, because he had declared that one could work with Haider."

The leader of the Party of European Socialists' (PES) in the European parliament, Spain's Enrique Baron Crespo, described the pact in Carinthia as "an incomprehensible, incoherent alliance given that Joerg Haider's ideology is totally incompatible with our own political vision."

Baron Crespo has announced that the PES will debate the matter in Brussels next week.

France's Socialist former foreign minister Pierre Moscovici, fumed that "the Socialists had no business forming an alliance with those who hanker for the days of the Third Reich."

Austria's conservative Foreign Minister Benita Ferrero-Waldner fired back that "Austria does not need advice from abroad".

"I would have thought that Moscovici had learned a lesson from the total failure of the sanctions of 2000," she added.

Ferrero-Waldner was referring to the six months of political sanctions the European Union imposed on Austria after Schuessel first included the FPOe in government in February 2000.