MEXICO CITY - Mexico's conservative party is hard at work planning a new government, confident that a bid by leftists to overturn its narrow election victory will fail, a senior party official said on Thursday.

Supporters of Andres Manuel Lopez Obrador, presidential candidate for the Party of the Democratic Revolution (PRD), during a rally outside Mexico's Federal Electoral Tribunal building in Mexico City, August 7, 2006. [Reuters]

While judges oversee a partial vote recount, and leftist protesters blockade central Mexico City, conservative Felipe Calderon is calmly fine-tuning his policies - but could add more social programs to reflect the new divide between left and right in Mexico.

"We are very much at ease that the result will be favorable to us," Ernesto Cordero, a top economic adviser to Calderon, said in an interview as across the country judges oversaw the recount of votes from 9 percent of polling stations.

"We don't want to lose any more time. We've already more or less mapped out the structure in different areas for the transition team," he said.

Election officials and judges have until midnight Sunday to finish a recount of votes from 11,839 polling stations to see if there is any basis to leftist Andres Manuel Lopez Obrador's claim of vote-rigging.

The country's electoral court could then take until until September 6 to name the new president.

Yet tensions are growing after the July 2 election, in which Calderon led by just 244,000 votes out of 41 million cast, exposing a gaping rift between well-heeled conservative voters and the millions who exist on less than $5 a day.

Calderon's plans to reduce taxes anger Lopez Obrador supporters who want to see more funding for social projects.

Cordero said Calderon's vision, which is pro-business and focused on keeping Mexico's oil, tourism and manufacturing-based economy robust, was not incompatible with one emphasizing poverty reduction.

"We remain open to talking with those who didn't vote for us. We are completely disposed to evaluating proposals from our election opponents and incorporating them in our program," he said, noting Calderon's campaign already included programs for child health care, study grants and housing credits.

"It's a vision that everyone is starting to spread about - that the best way to combat poverty is by generating opportunities for development and employment. So the (two visions) are completely compatible."

Conservative President Vicente Fox, who ended 71 years of one-party rule when he won the 2000 election, has failed to generate the jobs he promised or push through major structural reforms, although he did start programs giving poor families subsidies in exchange for sending their children to school.

Cordero said Calderon's plan to overhaul the income tax system in Mexico - which has one of the region's lowest collection rates - should increase the number of people who pay tax, ultimately increasing revenues.

Calderon has said he will seek alliances with opposition lawmakers to help him succeed where Fox failed in overhauling the tax system, pensions, labor laws and the oil sector.

Rather than target one of those areas to start with, Calderon would see which reform was most likely to win support among the opposition and begin with that one, Cordero said.

He said the National Action Party, or PAN, was confident protests by leftists demanding a country-wide vote recount would would die down quickly if the electoral court confirms Calderon as president-elect, ensuring a smooth transition.

Protesters have been camped out in Mexico City's Zocalo square and along a key boulevard for 11 days. This week they also briefly blockaded foreign-owned bank offices.