Austrian chancellor concedes centre-left victory

Austrian Chancellor Wolfgang Schuessel said yesterday the country's main opposition Social Democrats "presumably" won the election and congratulated their leader Alfred Gusenbauer.

"We have to go step by step. The first step is the question who won the election - and that is presumably Dr Gusenbauer," Mr Schuessel said in a live interview with state TV ORF.

"I congratulate him wholeheartedly," he added.

Projections based on counted votes showed the Social Democrats headed for a narrow upset victory over the governing conservatives.

The result suggested Mr Schuessel's campaign emphasis on staying a course of business-friendly tax cuts and playing up his image as a safe pair of hands stumbled on discontent over widening income gaps and Muslim immigration.

ORF said Dr Gusenbauer's Social Democrats were on course for 35.7 per cent of the vote, about one per cent behind their performance in the last parliamentary election in 2002.

Mr Schuessel's moderate People's Party plunged to 34.5 per cent from 42.3 per cent four years ago, ORF said, with 94 per cent of the votes tabulated. The outcome will not be final before some 400,000 postal votes from Austrians who were away from their home districts or abroad are counted by today week. But analysts said the Social Democratic triumph appeared secure.

The far-right populist Freedom Party, which called for mass expulsions of foreigners it branded welfare cheats, bogus asylum seekers or criminals, was holding third place with 11.1 per cent, and the Greens followed at 10.3 per cent.

In another unexpected result, rightist firebrand Joerg Haider's Alliance for Austria's Future, Mr Schuessel's junior coalition partner, was shown to narrowly make it into parliament with 4.2 per cent despite its split from Freedom last year.

If the final count confirms his triumph, Dr Gusenbauer will probably be asked by President Heinz Fischer to form the next government.

Dr Gusenbauer would probably seek a "grand coalition" with the People's Party as there seemed no other way to forge a majority.

But the extremely close projections could mean the final, official result, confirming whether Mr Haider did make it into parliament, might have to await the counting of postal votes cast by Austrians away from their home towns or abroad.

Pollsters had predicted that the People's Party, campaigning largely on pledges of further prosperity and tax relief, would gain the greatest number of votes albeit fewer than in 2002.

The Social Democrats, who accused Mr Schuessel of fostering social divisions but appeared damaged by a scandal around trade-union owned bank BAWAG, had been expected to lag Mr Schuessel by two to three percentage points.