NICOSIA (AFP) -- The Cyprus parliament on Thursday voted in favor of adopting the euro as planned on January 1, 2008 despite opposition from a senior partner in the island's ruling coalition.

The 56-seat house in Cyprus, which joined the European Union in May 2004, passed the legislation by 36 votes to 15 against after a three-hour debate. Five deputies were absent.

Safe passage was only been assured after the right-wing opposition party Disy agreed to back the euro bill although it indicated last week that it could scupper the vote.

The nominally communist Akel could not vote down the bill with its 18 seats alone, but a 'no' vote by Disy, which also has 18 deputies, would have killed it.

Disy deputies voted in favor following government assurances that official policy was to enter the eurozone next year with minimal negative impact on Cypriot society.

Akel argued it wanted to delay entry by one year because of concerns over the effect it could have on low-income groups. It fears a government austerity drive to meet euro convergence criteria will hinder social welfare programmes.

But Papadopoulos said his strongly pro-euro government could not pick and choose when to enter the eurozone. Employers and industrialists also warned that a no vote would be "catastrophic for the economy".

Under the terms of its membership of the European Union, Cyprus is obliged to adopt the euro, though the timing is not specified. The island formally applied last month to join the eurozone.

The next step in the path toward adopting the euro is due to come in May, when the European Commission and the European Central Bank assessing whether Cyprus meets strict macroeconomic targets on public finance, inflation, interest rates and exchange rates.

Gross Domestic Product is expected to grow by around 3.9 percent in 2007 and inflation is expected to be contained at 2.5 percent. Another key target is to have a balanced budget by 2010 and reduce public debt to 46 percent of GDP.

The Cyprus pound currently trades at about 1.73 euros and is expected to be locked in against the euro by around June-July.