 In 1985 nevertheless, major divergences with the direction of his party (Law of Historical Territories, personal clash with the president of the Basque Nationalist Party, Xabier Arzalluz, expulsion of all the organization in Navarre) created a major split within EAJ-PNV and Garaikoetxea, leading one of the factions (with greater support in Gipuzkoa, Navarre and Vitoria-Gasteiz, but not in Biscay nor the Araban countryside), he was replaced by José Antonio Ardanza in 1985.Soon after, the breach inside the party was complete and Eusko Alkartasuna was founded, with Garaikoetxea becoming its president and candidate to the Basque Presidency, a role that he held until 1999, when he retired from politics.He was elected as deputy in the Basque Parliament in all successive elections until 1998.