Sweden's Prime Minister Fredrik Reinfeldt conceded defeat on Sunday after a narrow victory by the centre-left over an Alliance government that has governed Sweden for eight years.

Prime Minster Fredrik Reinfeldt to resign on Monday

Sweden voted for a change of government on Sunday with a left-leaning bloc ending Prime Minister Fredrik Reinfeldt’s eight years in office at the helm of a conservative-led coalition.

Mr. Reinfeldt conceded defeat late on Sunday, and said he would hand in his government’s resignation on Monday. “The election campaign is over, we didn’t quite make it,” he said.

Mr. Reinfeldt, 49, also announced he would step down as leader of the conservative Moderate Party in the spring. He has led the party since 2003, and moved it more to the centre.

The task of forming a new government will first fall on Stefan Lofven, leader of the opposition Social Democrats.

Mr. Lofven, 57, said he was “prepared to attempt to form a new government” and will start talks with the Greens, but was prepared to cooperate with other “democratic parties”.

The left-leaning opposition party trio – the Social Democrats, the Greens and the Left Party – scored 43.8 per cent, compared to 39.3 per cent for Mr. Reinfeldt’s ruling four-party coalition.

Mr. Lofven faces a challenge as the three red-green parties will not be able to form a majority – garnering 159 of 349 seats, 16 shy of a majority.

Mr. Lofven, a former union leader who has not previously had a seat in parliament, ruled out cooperating with the anti-immigration Sweden Democrats despite their strong gains in Sunday’s polls. The party almost doubled their vote to around 13 per cent. “First of all, 87 per cent do not share their values,” Mr. Lofven said.

“Now is the time to put party tactics aside and take responsibility for Sweden,” he added.

The Social Democratic party’s 31 per cent was slightly over the 2010 result, and off the 35 per cent it had targeted. Mr. Lofven said that few parties in Europe polled over 30 per cent, and the Swedish political scene had seen a proliferation of parties.

The Moderate Party took about 23.3 per cent of the vote, seven percentage points off the 2010 election result, according to preliminary tallies.

Political observers expressed surprise over Mr. Reinfeldt’s decision to announce his resignation as party leader on election night. It was not known who would succeed him.

The Greens failed in their aim to retain the position as third-largest party but welcomed the chance of having a say over a new government.

“The people of Sweden have clearly voted for a new government and we will give them a new government,” Gustav Fridolin, one of the two leaders of the Greens, told party supporters.

His co-leader Asa Romson said “a responsibility has fallen on our shoulders.” The Sweden Democrats became the third-largest party.

Party leader Jimmie Akesson told party faithful that the party had achieved its aim of potentially holding the balance of power.

The other blocs have stated they would not cooperate with the Sweden Democrats.

“It will be tricky,” Henrik Ekengren Oscarsson, professor of political science at Gothenburg University, said on SVT.

The radical Feminist Initiative party – which would have supported Mr. Lofven – failed to clear the 4 per cent hurdle for inclusion in parliament.

“We have to admit we are slightly disappointed, but we have started a long process,” party leader Gudrun Schyman said.

Mr. Reinfeldt, in office since 2006, was seeking a third term for his coalition, which includes his conservative Moderate Party, the Liberal Party, the Centre Party and the Christian Democrats.

The opposition has argued for change, citing unemployment and falling test results in schools.

Finance Minister Anders Borg, a close confidante of Mr. Reinfeldt, said the Moderate Party had “paid a price” for ruling and taking responsibility during eight years in office.

Some 7.3 million people were eligible to vote. The Election Authority estimated turnout at around 83 per cent, which could top the 2010 result when all postal ballots were counted.

In addition to national elections, voters elected 20 county council assemblies and 290 municipal assemblies.

Local advisory referendums were held in six municipalities, including Gothenburg, Sweden’s second-largest city. The ballot there features a vote on a congestion fee for vehicles entering and exiting the city.

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