By Joshua Franklin

ZURICH (Reuters) - Swiss voters rejected a right-wing proposal to deport foreign law-breakers in a referendum on Sunday, handing a defeat to the country's dominant anti-immigration Swiss People's Party (SVP).

The plan to expel foreign residents guilty of anything from murder to speeding was proposed by the SVP, the country's largest political movement with around a third of the seats in Switzerland's lower house of parliament.

But it faced opposition from activists and business leaders who said it would violate human rights and complicate relations with Switzerland's main trade partner, the European Union, already angered by a 2014 vote that backed quotas on EU workers.

The final tally showed 58.9 percent of voters opposed the automatic deportations. Turnout was more than 62 percent, the highest for a referendum in Switzerland since 1992, said Claude Longchamp of the gfs.bern research and polling institute.

BLACK SHEEP

The SVP, which has built up support on a wave of anti-foreigner feeling, collected the 100,000 signatures needed to start the referendum under Switzerland's system of direct democracy.

Under the plans, foreigners would have been deported after completing sentences for serious crimes like murder, rape and armed robbery, or for two lesser offences committed within a 10-year span such as speeding or burglary.

Particularly unpalatable to opponents was the proposal to impose the automatic expulsion of "Secondos", as the Swiss refer to Swiss-born but non-citizen children of immigrants.

"Today the majority of voters delivered an affirmation to the foreigners in our country and most notably to the Secondos," Justice Minister Simonetta Sommaruga told a news conference.

The SVP campaigned for the motion with posters showing a white sheep kicking a black sheep out of Switzerland.

Activists countered by putting up posters depicting the cross on the Swiss flag as a swastika.

Opponents had argued that the move would violate the European Convention on Human Rights, which Switzerland has signed, particularly by exposing deportees' families to financial hardship.

Story continues

In one of three other referendums on Sunday, voters backed the construction of a second tunnel through the Gotthard mountain range, a main north-south transit route. They rejected a proposal to ban trading in agricultural derivatives.

In the day's closest result, voters very narrowly rejected a proposal to abolish a tax disadvantage for married couples and civil partnerships.

(Reporting by Joshua Franklin and Paul Arnold; Editing by Janet Lawrence and Ros Russell)