Blocher is demanding government seat
The far-right Swiss People's Party (SVP) has won the biggest share of the vote in parliamentary elections, throwing a decades-old system of consensus government into turmoil.
The party won 11 extra seats in the lower house of parliament, taking its total in the 200-member parliament to 55. It took nearly 27% of the vote.
The party, once the smallest of four governing parties in the Swiss coalition, is now the largest.
Flamboyant party figurehead leader Christoph Blocher has been put forward to take a second seat for the party on the seven-member cabinet.
Far-right SVP 55 seats - up 11
Social Democrats 52 - up 1
Radicals 36 - down 7
Christian Dems 28 - down 7
The election's biggest losers were the centrist parties, the Christian Democrats and the Radicals, one of which will now have to give up a seat to make way for the controversial Mr Blocher.
If they refuse, the People's Party has threatened to withdraw from the government altogether and become the official opposition.
The BBC's Imogen Foulkes in Bern says that after decades in which cabinet seats were shared out in the same way, Swiss politics look set for a major upheaval.
The old system of consensus politics, known as the "magic formula", was drawn up in 1959 to share out power between the four parties.
Analysts suggest the formula is now in jeopardy.
"The developments of this evening surely show us that the
myth of a stable political Switzerland is probably waning away
now," said Julius Baer Chief Economist Janwillem Acket.
"The result of the general election is a prelude to more
political instability in this country and probably the prelude
to the vanishing of another myth - the special status that
Switzerland has enjoyed since the end of the World War II."
The party ran an anti-foreigner campaign, in which asylum seekers were portrayed as criminals and drug dealers,
SVP leader Christoph Blocher wants a cabinet seat
But the campaign seems to have found favour with more voters than it offended, says Imogen Foulkes.
Official results are due later on Monday. The Social Democrats (SP) on the left are believed to have fared well.
"The SVP is winning voters in all cantons, about 1-8% more," election analyst Claude Longchamp told Swiss TV.
Mr Blocher, a billionaire industrialist, said the result "looks superb for Switzerland".
"The fact that the Swiss have expressed such trust in the SVP means they want a change in policy."
SWISS PEOPLE'S PARTY
Opposed to European Union membership
Accused of racism after saying drugs controlled by "Albanians and black Africans"
Used the word "negro" in campaign poster
Switzerland's once strong economy is heading for a slump, unemployment is rising, and social benefits are being cut back.
The election campaign was dominated by the SVP's anti-foreigner propaganda, overshadowing concerns about the economy.
The party has doubled its share of the popular vote in the last 10 years.
Its campaign, including posters portraying asylum seekers as criminals, was sharply criticised by anti-racism groups.
Centre-right Liberal Party parliamentarian Barbara Polla said she had sensed that many elderly people felt more was being done to help immigrants than pensioners.
"I think there is a very large amount of work that needs to be done to reassure people, and to show that the presence of foreigners... is a positive factor, especially for the economy," she said.
The United Nations refugee agency also said the party's propaganda contained some of the most anti-asylum advertisements ever seen in Europe.