BBC's Claire Doole: "Exit polls show a major shift in support"

Preliminary results indicate the People's Party will have 44 seats, more than any other party except the Social Democrats who have 51 after losing three seats.

The party's strong electoral showing mirrors the success of the far right Freedom Party in neighbouring Austria.

But, according to the our correspondent in Geneva, Switzerland's unique political system means the result will have less impact because the Swiss Parliament has less power with key policy decisions taken in national referendums.

Joerg Haider, the leader of the Austria's Freedom Party said on Monday the result signalled the end of the "rise of socialism".

"The new millennium will begin with an upswing in innovative forces and the end of the rise of social democracy," he said.

Under the Swiss system of proportional representation the Social Democrats will still be the dominant party in parliament, closely followed by People's Party.

Election workers prepare to count the votes

The centre-right Radical Democrats is set to drop to third place with the right-wing party, the Christian Democrats, trailing in fourth.

Observers say the support for the People's Party is reminiscent of the gains by Austria's right-wing Freedom Party.

The Swiss President, Ruth Dreyfuss, called the result of the elections, with a turnout of less than 40%, a vote of discontent showing a lack of confidence.

The People Party's campaign to curb immigration, keep neutral Switzerland at arm's length from the European Union and cut taxes appears to have struck a chord with the voters.

If the results are confirmed, the trend would mark a strong shift to the right by Swiss voters.

However, despite its strong showing, the People's Party's impact on national politics will not be great, as under the Swiss political system all major problems are decided by national referendums.

Official results are expected on Monday.

Switzerland First

The popularity of the SVP is greatly to do with influence of its financial benefactor and most charismatic politician, Christoph Blocher.

His Switzerland First campaign has hardly stopped during the four years between elections and his political message has been unambiguous, if negative, according to our correspondent.

No to EU and UN membership and a crackdown on immigrants, most of whom, he says, are abusing the country's liberal asylum laws.

In a country rich enough not to need to join the European Union and which has taken in tens of thousands of Kosovar refugees, it is a potential vote winner.

Even last week's revelations that Mr Blocher had praised a book denying the existence of the holocaust is unlikely to help his political opponents.