After a day of tense negotiations, the Austrian president has said he will swear in a new coalition which will include the far right Freedom Party, tomorrow.

The announcement came after the leaders of a proposed coalition returned to the Presidential palace for further talks with President Klestil about the composition of their government.

A crowd gathered to demonstrate against the Freedom Party leader, Joerg Haider, whose involvement in the negotiations has also drawn fierce international criticism.

The conservative People's Party leader, Wolfgang Schuessel, who will be Chancellor in the new government , described a European Union threat of sanctions over Mr Haider as unfair, unnecessary and possibly counter-productive.

But in an attempt to allay European fears, the two party leaders signed a special accord guaranteeing human rights and democratic values, and accepting Austrian responsibility for Nazi crimes. Mr Haider himself will not be a minister, but his party is expected to take five important cabinet posts.

From the newsroom of the BBC World Service