With the count almost complete, parties backing the reformist President Milo Djukanovic had a clear victory over the Socialist People's Party (SNP) of the hardliner Momir Bulatovic.

President Djukanovic: received congratulations from campaign staff

With 94.2% of the votes counted, preliminary results released by the electoral commission show the president's coalition of parties winning 49.5% against 36.07% for the SNP.

A spokesman for the Socialists said there had been nothing to indicate any irregularity or fraud and it would accept the outcome.

Mr Djukanovic congratulated his supporters on what he called a great victory.

"I am very happy that Montenegro has again shown that it has the wisdom, courage and resolve to resolutely resist those who had decided to enslave it," he said.

But final victory would come only when democracy had won throughout Yugoslavia," he said

His remarks were taken as a clear reference to President Milosevic.

Challenge to Milosevic

Montenegro is dominated by Serbia in what remains of the federation of Yugoslavia. But despite its small size, it could have a dramatic impact on Yugoslavia's President Slobodan Milosevic.

Main opponent Momir Bulatovic: supported by Milosevic

The BBC correspondent in the Montenegrin capital, Podgorica, says that if Mr Djukanovic's coalition wins enough seats, he will have substantial leverage in the upper house of the Yugoslav parliament and may try to topple Mr Milosevic from power.

Mr Djukanovic has accused the Balkan strongman of destroying the region and leaving Yugoslavia internationally isolated and economically battered.

Mr Djukanovic, 35, a former communist, was an ally of Mr Milosevic and Mr Bulatovic during the wars of the Yugoslav succession, but later turned against them.

He is promising to introduce radical reforms for Montenegro.