Stockholm (AFP) - The winner of Sweden's election, Social Democrat leader Stefan Loefven, embarked Monday on the difficult task of forming a government while keeping his pledge to exclude a hugely strengthened far right party.

Loefven's decision to refuse to deal with the anti-immigration Sweden Democrats under any circumstances is likely to force the 57-year-old former trade unionist into complex negotiations with other parties.

"Now our work begins in earnest," he told reporters Monday, saying "we need cooperation" between left and right.

Loefven started talks with the Greens about a possible coalition, and was also expected to seek the support of the former communist Left Party in getting the crucial annual budget passed later this year.

The round of talks were the product of an election that delivered a narrow win for Loefven but gave no clear mandate to either side of the 349-member parliament.

In Sunday's parliamentary vote, the Social Democrat-led, left-green group got a total of 43.6 percent of the vote, while the outgoing centre-right Alliance garnered 39.4 percent.

But the real upheaval on Sunday was a massive gain for the Sweden Democrats, which only entered parliament in 2010 and have more than doubled their support to 13.0 percent.

This will allow the Sweden Democrats, which was a virtual non-entity less than a decade ago, to boost their seats in the legislature from the current 20 to 47.

- Rise of the right -





"The rise of the Sweden Democrats is the biggest change in the Swedish party system so far this century," said Andreas Johansson Heinoe, a senior fellow at the liberal think-tank Timbro.

The emergence of the Swedish far right is considered part of a wider shift to populism in Europe, which also saw an anti-euro party make gains in two German state elections on Sunday.

In Sweden, the trend has been underpinned by growing public concern about an influx of refugees that is forecast to reach up to 90,000 this year.

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The growth of Sweden Democrats is also viewed as a triumph for their 35-year-old leader, Jimmie Aakesson, who has worked hard to shed the party's previous racist image and said Sunday that it had become "the absolute kingmaker".

Loefven has repeatedly rejected any role for the Sweden Democrats in the new parliament, in line with the practice of the seven traditional parties over the past four years to ignore the far-right newcomers.

- No easy alternatives -

"Sweden needs a resolute government, and the Sweden Democrats will not be getting any influence," he said again Monday.

The Sweden Democrats' anti-immigration stance is widely dismissed across the political spectrum as directly contradicting Sweden's long-cherished tradition of tolerance and openness to foreigners.

However, the principled refusal to deal with the Sweden Democrats could collide with political reality, according to Timbro's Heinoe.

"It will be very difficult for a centre-right or centre-left government to obtain a majority in parliament," he said.

The only other option for Loefven –- to appeal to the members of the outgoing centre-right parties to vote for his policies –- could also prove difficult, at least in the short term.

The centre-right parties are seen as particularly reluctant to support measures such as higher taxes that threaten to roll back the market-oriented reforms they have introduced over eight years in government under outgoing Prime Minister Fredrik Reinfeldt.

"It's really a tough job for Stefan Loefven, and he would have preferred a more open attitude from the centre (right) parties during the campaign," said Torsten Svensson, a political science professor at Uppsala University.

There is no easy face-saving way for the two wings of parliament to suddenly cooperate, even if it is partly with an eye to keeping the Sweden Democrats away from any real influence.

"It's going to be difficult for the parties to enter into cooperation that they have categorically ruled out in advance, or at least not prepared their voters for," the Dagens Nyheter daily said in an editorial.

However, Mikael Sundstroem, a political scientist at Lund University, argued that there is a long tradition of minority governments in Sweden, including the government that was just voted out of power.

Besides, he said, the centre-right parties have an added incentive to seek common ground with the left.

"They know that if they don't cooperate, it's only going to benefit the Sweden Democrats," he said.

Reinfeldt formally resigned Monday, stepping down from a job he has had since 2006, during which he successfully steered Sweden through the global financial storms.

"He has governed Sweden very well," German Chancellor Angela Merkel said, pointing out the prosperity Sweden has enjoyed during his years in power.