Shimon Peres is to leave the Labour Party and give his backing to the new party headed by prime minister Ariel Sharon, Israel's Channel 10 TV reports.

According to the TV channel the move would entail Peres giving his support to Sharon's new party in next year's general election, but would not see him formally joining the party.

The station said Peres conveyed his decision to one of its reporters accompanying him on a trip to Europe where he attended a football "peace match" in Barcelona, Spain, on Tuesday pitting a team made up of Israelis and Palestinians against a Spanish side.

Channel 10 correspondent Gilad Yadin said Peres had decided to leave Labour, which expelled him as leader in a 9 November primary election, and "embark on a new political path".

Twice prime minister, but never elected to the position, Peres was visibly stunned earlier this month when firebrand trade union chief Amir Peretz drove him out as Labour Party leader in a primary election.

Israeli media reports said Sharon would offer Peres the job of peace envoy if the new Kadima party won the 28 March poll.

Sharon, in a gamble that could reshape Israeli politics for years to come, quit the Likud Party last week, saying he could not push for peace with the Palestinians while "wasting time" battling far-right rivals in the movement he co-founded in 1973.

At the same time, he has reaffirmed a pledge to keep major Jewish settlement blocs in the occupied West Bank in any future peace treaty, a prospect Palestinians said would deny them a viable state.

Peres's support for Sharon would represent an earthquake with the potential to bring down the decades-long political structure that has left Israel stalemated between hawks and doves - led by Labour and Likud.

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