Themistoklis Sophoulis, another of the Liberal old guard, formed a government at the end of 1945; then he announced that in March 1946 a national election would precede by two years the promised plebiscite on the monarchy. This decision inverted the order of the two national ballots agreed upon in the Varkiza Agreement. The leftist parties, claiming that fair and impartial elections were impossible in the prevailing climate of violence and repression, called a boycott of the election. When war-weary Greeks went to the polls, their choice was limited by the decay of traditional parties under Metaxas. The election, which was marred by low turnout and considerable fraud, gave power to the People's Party, a loose coalition of the old Populist Party with Metaxasists, monarchists, and anticommunists. The new leader of the government was Konstantinos Tsaldaris, a nephew of the prewar Populist leader.

The Tsaldaris regime renewed the persecution of the left, removing civil servants and university professors from their posts because of their politics and accelerating the manhunts of rightwing bands. In 1946 over 30,000 men and women were interned in concentration camps or exiled. The country drifted ever closer to open civil conflict. Far ahead of schedule, Tsaldaris demanded a plebiscite on the monarchy. Rather than waiting until 1948, as had been announced by Sophoulis, he called for the referendum in September 1946. A highly suspect vote, which included coercion if not outright rigging, restored the monarchy by 68 percent to 32 percent. For many Greeks, the restoration represented a betrayal of everything they had fought for. Although there was widespread opposition to the idea of a communist government, there also was deep antipathy to the monarchy in general and especially to King George, who had been tainted by his closeness to Metaxas. On the verge of civil strife, the KKE resumed recruiting and began reassembling the nucleus of ELAS warriors who had fled into the mountains.