Karen Demirchian heads the Miasnutiun or Unity bloc, which has polled around 43%, with almost all votes counted. Its nearest rival, the Communist Party, won only about 12%. The turnout was 55%, just over a million voters.

Unity press secretary Vahram Brutian said that the bloc would control 66 seats, just enough to achieve an absolute majority in the 131-member parliament.

The BBC's Steven Mulvey: Demirchian's career relaunched

Demirchian led the Armenian Communist Party for 14 years during the 1970s and 1980s. Most Armenians see his rule as a period of welcome stability, especially in the light of the subsequent war with neighbouring Azerbaijan over Nagorno-Karabakh and the economic chaos which followed the collapse of the Soviet Union in 1991.

Demirchian had run for president last year, but lost in that race to an independent candidate, Robert Kocharian.

The Unity bloc is an alliance between Demirchian and Defence Minister Vazgen Sarkissian, but some observers think the two men will find it harder to work together in government than they have during the election campaign.

"I don't know what the deal between Demirchian and Sarkissian was," said editor of the Azg liberal newspaper Hagop Avedikian. "In any case, this parliament is more pro-Communist than before."

Former premier loses

Former prime minister Vazgen Manukian was shut out of power after his centrist National Democratic Union failed to reach the 5% threshold needed to win seats in parliament.

Parliamentary speaker Khosrov Arutyunian was another loser. He failed to hold his seat in the capital, Yerevan.

'Inaccurate electoral register'

International observers said the conduct of these elections was much improved, compared to other Armenian elections held over the past four years.

They noted that the nationalist party Dashnaktsutiun had been legalised, and its members released from prison. The nationalists polled 7.3% and will enter parliament.

However, observers said they were seriously concerned about "organisational shortcomings", such as a highly inaccurate electoral register, which deprived some people of the right to vote.