Swedish Prime Minister Stefan Lofven's Social Democrats remained the biggest party in Sunday's general election, as the anti-immigrant far right made gains and vowed to exert "real influence" in politics.
With ballots in more than 95 per cent of districts counted, the Social Democrats were on course to win 28.3 per cent of the votes, down from 31 per cent in the 2014 elections.
It was uncertain however if Lofven, who heads one of the few left-wing governments in Europe, would be able to rustle up enough support in parliament to form a government.
Both the premier's three-party, left-wing bloc and the opposition centre-right Alliance of four parties were each seen taking 143 of 349 seats in parliament, but both would fall well short of the 175 needed for a majority.
Opposition leader Ulf Kristersson of the conservative Moderates has vowed to foil Lofven's attempts to form a government, intent on building his own centre-right coalition.
The far-right Sweden Democrats, who have capitalised on voters' frustration over immigration after the country welcomed almost 400,000 asylum seekers since 2012, were seen making steady gains, rising from 12.9 per cent in 2014 to 17.7 per cent.
"We have strengthened our role as kingmaker.... We are going to gain real influence over Swedish politics," Sweden Democrats leader Jimmie Akesson told cheering supporters at an election night party.
The Sweden Democrats remain the third-biggest party -- failing to overtake the Moderates who were credited with 19.8 percent of the vote.
The Sweden Democrats score was however below the 20 to 30 per cent Akesson had hoped to win.
Marine Le Pen of France's far-right National Rally -- formerly known as the National Front -- hailed the Swedish party's rise, tweeting: "Yet another bad night ahead for the European Union. The democratic revolution in Europe is moving forward!"
"It's... about decency, about a decent democracy. And the Social Democrats and a Social Democratic-led government is a guarantee for not letting the Sweden Democrats extremist party, racist party, get any influence."
Anna Berglund, a 28-year-old lawyer who voted for the small Centre Party at a polling station in Stockholm's upmarket Ostermalm neighbourhood, agreed. "I'm afraid we're becoming a society that is more hostile to foreigners."
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