Volodymyr Lytvyn's party will join Ukraine's new coalition
The pro-Western coalition government in Ukraine which collapsed in September amid disagreements has been reformed, says the speaker of parliament.
Fresh elections had been expected following months of deadlock between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko.
But supporters of the two leaders have now agreed to work together in a new coalition joined by a smaller party.
The dispute had paralysed Ukraine as it faces a crippling financial crisis.
The formation of the new coalition was announced by the head of the smaller party, Volodymyr Lytvyn, immediately after he was re-elected as parliament's speaker.
He said a formal agreement was expected to be signed within days.
The governing coalition collapsed amid acrimony in September when President Yushchenko accused Ms Tymoshenko of supporting plans to trim presidential powers.
The two former political allies also disagreed over how to respond to Russia's war with Georgia.
As negotiations faltered, the president ordered fresh parliamentary elections.
But they were first postponed and then cancelled in the face of severe damage to Ukraine's economy from the global economic crisis.
The country has recently negotiated a $16bn (£11bn) loan from the International Monetary Fund.