The People's Party (SVP) renewed its call on Monday for a second cabinet seat in light of its huge electoral gains.

But it backtracked on threats to quit the government coalition if it fails to get the extra cabinet post.

Party president Ueli Maurer said: "Whatever happens, the SVP does not intend to conduct a policy of opposition. The SVP will remain in the national government."

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

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 centre-right Radical Democrats drop to third place with 43 seats, while the Christian Democrats won 35 seats.

The Freedom Party campaigned on a broadly negative platform: anti-European, anti-immigration and anti-socialist.

It capitalised on Swiss concerns at the record numbers of asylum seekers, caused partly by the Kosovo war.

Low turnout

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

Election workers prepare to count the votes

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.

With a voter turnout of less than 40%, Swiss President Ruth Dreyfuss called the result a vote of discontent.

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.

The results mark a strong shift to the right by Swiss voters.

However, despite People's Party's strong presence in the parliament, its impact on national politics will be tempered by its comparatively weak position in Switzerland's upper house.

Switzerland First

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

Mr Blocher, who made his millions in the chemical industry, has been a fierce political camapigner in the four years between elections.