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With nearly all ballots counted, the incumbent centre-left coalition is marginally ahead of the centre-right Alliance. Nationalist party the Sweden Democrats (SD) have won about 18 percent, up from 12.9 percent in the 2014 elections, but short of the 25 percent some opinion polls had predicted. The country now faces a period of political uncertainty as SD promised to wield “real influence” in parliament. The question remains which parties will be able to govern, either forming cross-bloc alliances between centre-right and centre-left parties, or accepting support from the Sweden Democrats.

With votes in all but two of the 6,004 districts counted, the distribution of the 349 parliamentary seats are as follows: Centre-left bloc: Social Democrats 101 (down from 113)

Green Party 15 (down from 25)

Left Party 28 (up from 21) Total for bloc: 144 (down from 159) Centre-right bloc: Moderates 70 (down from 84)

Centre Party 31 (up from 22)

Liberals 19 (holding at 19)

Christian Democrats 23 (up from 16) Total for bloc: 143 (holding at 143) Sweden Democrats 62 (up from 49)

Sweden election results breakdown

Sweden election results: Ulf Kristersson, leader of Sweden's Moderate Party

A new government is expected to take weeks to form, with analysts predicting long and complicated negotiations to form a majority or minority coalition. All parties have long promised not to form a coalition with SD, shunned for its roots in neo-Nazi extremism, although SD leader Jimmie Akesson said he was ready to negotiate. Centre-right Alliance prime minister candidate Ulf Kristersson, head of the Moderates, called on outgoing prime minister Stefan Lofven to resign, saying the centre-left coalition had run its course. But Mr Lofven refused, urging cross-bloc cooperation. He said: “The Sweden Democrats can never, and will never, offer anything that will help society. They will only increase division and hate.”

Sweden election results: SD leader party leader Jimmie Akesson talks to reporters on Monday morning

The mainstream parties now had a “moral responsibility” to form a government, he said. Some early observations are predicting Mr Kristersson to seek a minority centre-right coalition, possibly with the Christian Democrats, and with ad hoc parliamentary support from SD. If this manifests, it will give SD the opportunity to influence policy, particularly on immigration. Addressing supporters on Sunday night, Mr Akesson said the seats gained represented victory. “No-one can take that away from us,” he said.

Sweden election results: Prime minister and party leader of the Social democrat party Stefan Lofven