Victory for Austrian opposition

Alfred Gusenbauer looks set to be chancellor

Austria's opposition Social Democrats have won a surprise election victory, defeating Chancellor Wolfgang Schuessel's People's Party.

With all but absentee ballots counted, the centre-left Social Democrats won 35.7% of the vote, narrowly beating the the People's Party at 34.2%.

Even as votes were being counted, Mr Schuessel said it would take "a small miracle" for his party to win.

The Social Democrat's Alfred Gusenbauer is likely to become the new chancellor.

The far right Freedom Party, which ran an anti-immigrant campaign, came in at third place with 11%, followed by the Greens at 10%.

The far-right party founded by Joerg Haider, the Alliance for the Future of Austria, seems just to have made it into parliament with 4% - this, despite its split from the Freedom Party last year.

Before the vote, opinion polls had suggested a narrow victory for Mr Schuessel's party.

Chancellor Wolfgang Schuessel has admitted defeat

About 400,000 postal votes have still be to be counted and that could affect the final results, in particular, for the Greens and the Alliance for the Future of Austria.

Coalition negotiations are likely to be time-consuming and difficult, reports the BBC's Bethany Bell in Vienna.

The most obvious alliance is a grand coalition between the People's Party and the Social Democrats, an option preferred by many Austrians.

Otherwise, the conservatives could in theory try to form a coalition with the two far-right parties. But so far, Austria's leading politicians are refusing to commit themselves.

Mr Schuessel took office in 2000 in a controversial alliance with the far-right Freedom Party, then led by Mr Haider. He won re-election in 2002.

More than six million Austrian voters were eligible to vote for the 183-seat parliament.