The leader of Sweden's Social Democrat-led opposition, Mona Sahlin, conceded defeat in an election last night and said it was up to Prime Minister Fredrik Reinfeldt to build a majority government.
The ruling centre-right coalition looked set to win the most votes but lacked an outright majority after a far-right party won its first seats.
The election authority said preliminary results showed Mr Reinfeldt's four-party "Alliance" coalition winning 173 seats in the 349-seat parliament.
The Social Democrat-led opposition bloc won 156 seats while the anti-immigration Sweden Democrats got 20 seats, depriving the centre-right of a majority.
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