Abstract: Polarization-division multiplexed coherent optical orthogonal frequency multiplexing (PDM-CO-OFDM) is an important physical layer technology for high spectrum efficiency optical network. But PDM-CO-OFDM is very sensitive to optical phase noise. In PDM-CO-OFDM system with a large symbol period-laser linewidth product, the system's performance is severally degraded by the optical phase noise induced inter-carrier-interference (ICI). The PDM-CO-OFDM system employing advanced modulation format (e.g. 16QAM) becomes more sensitive to optical phase noise when increasing the modulation format order. To mitigate the optical phase noise in above systems, a novel algorithm, P-LI-SCPEC is proposed, which employs linear interpolation, phase passing and symbol slicing. The mathematical model of the proposed algorithm is developed. Mentor-Carol simulation has been conducted based on the model. By comparing with several other optical phase suppression algorithms including our previously proposed algorithm LI-SCPEC, the proposed algorithm achieves better performance in suppressing the optical phase noise, and thus improves the system's tolerance to laser linewidth. The new algorithm will promote the application of PDM-CO-OFDM both in the optical access network using low cost laser, and in the optical back-bone network with high order modulation format.