Minority rule beckons for Canada

Conservative challenger Stephen Harper's hopes were dashed

Canada's ruling Liberals are set to return to power but without an outright majority in parliament, according to first results of Monday's election.

Defying opinion polls which showed the Conservatives neck and neck, they must now find a partner among the smaller parties to continue in office.

The Quebec separatists or New Democrat leftists may now become kingmakers.

The Conservative Party leader Stephen Harper has conceded defeat to Prime Minister Paul Martin.

PRELIMINARY ELECTION RESULTS 1: Liberal Party - 36.7% 2: Conservative Party - 29.6% 3: NDP - 15.7% 4: Bloc Quebecois - 12.4% 5: Other - 5.6% Bittersweet victory for Liberals

The Liberals are now set to form the first minority administration in Canada in a quarter of a century.

Preliminary results suggest Prime Minister Paul Martin's party has won 135 seats overall, short of the 155 needed to gain absolute control of the 308-seat House of Commons.

But the Conservatives seemed set to win below 100.

Mr Martin called the vote five weeks ago, seeking a mandate for his rule after replacing Jean Chretien as prime minister last year.

'Challenge' ahead

"We as Liberals have lost votes," Mr Martin acknowledged to supporters.

"The message in this regard was unmistakable - Canadians expect more from us, and as a party and a government we will do better."

He said his party was "up to the challenge" of minority government.

The BBC's Daniel Lak in the capital, Ottawa, says the Liberals will be pleased to have done better than even their own internal opinion surveys had indicated.

The Liberals may not be on their own anymore

At one point during the five-week campaign, Mr Harper was well in front of Mr Martin and was telling his followers to prepare for government.

Analysts had warned all along that the electorate wanted to punish the incumbent Liberals, who have governed the country with comfortable majorities since 1993.

A scandal involving misappropriation of public money by Liberal-affiliated advertising agencies in Quebec probably cost Mr Martin his majority, our correspondent says.

But many voters may have been deterred by some of the right-wing economic policies and social conservatism of Mr Harper's party.

The big success of the vote count has been the Bloc Quebecois, which only ran candidates in Quebec and campaigns for the separation of that province from the rest of Canada.

That party looks set to hold the balance of power in what is certain to be a parliament with no single party able to hold sway without making compromises, our correspondent says.

However, the success of the Bloc Quebecois is seen more as a matter of anger against the Liberal party than genuine support for the French-speaking province leaving the Canadian federation.

Canadians could well find themselves going to the polls again quite soon, our correspondent adds.