Brazil's most popular opposition leaders to join forces against President

BRASILIA/SAO PAULO (Reuters) - Two of Brazil's most popular opposition leaders will join forces on Saturday, a party source told Reuters, an unexpected alliance that could pose a major challenge to President Dilma Rousseff in next year's election.

Ms Marina Silva, a colorful former environment minister who is running second in polls for next year's vote, will announce she is joining the PSB Party of Pernambuco state Governor Eduardo Campos, a PSB source said on condition of anonymity.

It is undecided whether Ms Silva or Mr Campos will be the party's presidential candidate, the source said. Several local media outlets including newspaper Folha de S.Paulo said Mr Campos was likely to head the ticket, with Ms Silva as the No. 2.

Ms Silva said on Twitter that she would hold a press conference later on Saturday.

Whoever runs, the alliance creates a center-left, business-friendly alternative to Ms Rousseff that seems well-positioned to cash in on growing discontent among the business elite with Brazil's stagnant economy, as well as popular unrest following a wave of anti-government street protests in June.

Ms Rousseff, a pragmatic leftist, has not officially announced her candidacy for re-election in 2014 but she currently leads polls by a healthy margin. She retains broad support among Brazil's poor, thanks to unemployment near record lows and her party's success in reducing poverty over the past decade.

Ms Silva, who grew up poor in the Amazon and worked as a maid before graduating from college, is very popular among younger Brazilians, environmentally conscious voters and evangelical Christians. She placed a strong third in the 2010 presidential election on the Green Party ticket, and has been rising in polls since the June protests.

However, her bid to create a new political party failed this week because of legal technicalities.

The PSB offers Ms Silva an organised, well-funded party that is relatively distanced from the corruption accusations that have plagued other Brazilian political groups, including Ms Rousseff's Workers' Party, in recent years.

Some senior politicians have said privately that Ms Silva, who has suffered over the years from health problems including hepatitis, seemed more comfortable in a "figurehead" role that would allow her to pursue her passions, including environmental issues, without worrying about other concerns like the economy.

Mr Campos is well-regarded by business leaders, and his party was part of Ms Rousseff's governing coalition until earlier this year. He broke ranks after criticising her for excessive intervention in Brazil's economy, which has struggled with slow growth since Ms Rousseff took office in early 2011.

Mr Campos has polled only in the single digits for next year's presidential vote, but an alliance with Ms Silva would likely boost his name recognition and credibility with many voters.

Mr David Fleischer, a political analyst in Brasilia, said he believed Mr Campos was likely to be the PSB's presidential candidate. He said an alliance with Ms Silva would be "interesting" to many voters and could be powerful enough to push the election to a runoff.

Until Saturday, most political observers had expected Ms Silva to join a smaller party, and virtually no one had predicted an alliance with Mr Campos.

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