Swedish premier poised for narrow election victory

Sweden's long-serving Social Democratic premier, Goran Persson, was last night expected to cling to power as an exit poll put his party and its allies ahead of centre-right rivals in a close and unpredictable election.

Minutes after polling stations closed at 8pm last night a Swedish television exit poll of 9,000 voters predicted that the Social Democrats, the ex-Communist left and the Greens would win 52.4 per cent of the vote, with a group of centre-right parties scoring 44.3 per cent. Another poll on TV4 television of a smaller sample of 2,500 voters gave the Social Democrat- Left-Green bloc 51.3 per cent, and the centre-right coalition 45.7 per cent.

Surveys last week had suggested a tighter margin than the figures in the exit polls, indicating that the Social Democratic party, which campaigned on upholding Sweden's generous cradle-to-grave welfare system, and their allies gained in the final hours of campaigning.

The outcome was being watched closely in European capitals to see if Sweden will buck the trend of centre-right election victories in the Netherlands, France and Denmark.

The return to power of the Social Democrats would be good news for those who want Sweden to join the euro because Mr Persson – a staunch supporter of monetary union – is expected to hold a referendum next year.

However the fact that Mr Persson faced such a close finish was a reflection of the extent to which the election has gone wrong for him. In the early summer polls suggested he would win easily. Last week the Svenska Dagbladet newspaper predicted such a tight race that the result may rest on some 50,000 postal ballots.

Mr Persson has been on the defensive over the two dominant election issues, tax and immigration, as the Social Democrats defended the welfare system and high taxation.

Nevertheless the centre-right opposition have been hampered by divisions and distractions. Bo Lundgren, the uncharismatic leader of the Moderate party, put tax cuts at the top of his agenda – only to be overshadowed by a Liberal Party proposal that immigrants should have to undergo Swedish language tests. Yesterday Mr Lundgren said: "The voters have got a pretty clear picture of the alternatives, but I would have liked a real debate about economy and growth."

While the centre-right opposition has made much of the running in the media it has suffered from a failure to agree who would be Prime Minister in the event of victory.

While the Liberal Party, whose support has tripled to some 13 per cent in opinion polls, shook up the campaign by highlighting the language test issue, it has taken votes from its right-wing potential partners as well as from Mr Persson. One exit poll put Mr Lundgren's party at 15.2 per cent, down more than 7 percentage points from the last elections in 1998.