The breakthrough came as Greece joined its EU partners in approving a multi-million euro aid package to Turkey following last month's devastating earthquake.

The BBC's Justin Webb: "The Greek change of heart could prove highly significant"

The centuries-old hostility between Greece and Turkey has previously led to Greece blocking moves towards closer relations between the EU and Ankara.

But speaking at a meeting of EU foreign ministers in Finland, Mr Papandreou said he supported giving Turkey candidate status for the European Union and eventual membership.

"We want to become the steam engine inside the EU to help Turkey's European course," the foreign minister said.

'Substantial improvement'

He spoke of a "substantial improvement" in relations between the two neighbours, attributing it to the quake which claimed nearly 15,000 lives in north-west Turkey.

"The earthquake created an amazing climate which was I think a first in diplomatic history," Mr Papandreou said.

"Because out of this tragedy there was a human warmth that came out between the two peoples.

"I just hope that this climate can remain."

Territorial disputes

He warned that problems remained in relations between the two countries, mentioning Cyprus - where Ankara supports the breakaway government in northern Cypus which was established after the 1974 Turkish invasion - and conflicting territorial claims to certain Aegean islands.

"I don't think that all of a sudden everything has been solved," Mr Papandreou said.

"But a climate exists that could allow for a breakthrough on these issues."

Greece is not alone in retaining some reservations regarding Turkish EU membership.

The Swedish government is also understood to have voiced unease at the ministers' meeting about allowing Turkey onto the list, saying Ankara's human rights record was still unsatisfactory.

PM defends change

In the Greek city of Thessalonki, Prime Minister Costas Simitis defended his government's change of heart over Turkey.

"Our policy is one of peace and co-operation," Mr Simitis told a news conference.

"Turkey can now re-examine things, to look at its own position and views," the prime minister said.

Reconstruction aid

EU officials say the Greek Government's move has enabled the union to begin forging closer ties and to release significant sums of money.

The emergency assistance includes a 30m euros ($31.8m) in aid for prefabricated housing, and 150m euros ($160m) over three years in economic aid.

The ministers have also

• unblocked a $150m grant which had been agreed last year
• backed a 600m euros ($636m) loan from the European Investment Bank. Another loan of $750m remains frozen.

Turkey has told the United Nations that quake damage could total about $10bn.

Foreign countries have pledged more than $100m so far. The International Monetary Fund is to visit Ankara next week to discuss a $330m emergency loan and the World Bank has earmarked $300m.

Slow progress on other candidates

But the progress made on the question of Turkey was not matched in the case of the other countries hoping to join the European Union.

German Foreign Minister Joschka Fischer pressed at the meeting for five Eastern European countries and Cyprus to be given dates for their eventual membership.