The Hague: The Liberals were one seat ahead of Labour with 88 percent of the vote counted early Thursday after cliff-hanger general elections in the Netherlands, the far-right Party for Freedom the big winner in third place.
The Liberal party (VVD) led by Mark Rutte, which had campaigned on the need for deep spending cuts, and the Labour party (PvdA) of Job Cohen had been tied for hours at 31 seats each in the 150-seat Parliament after Wednesday`s polls.
But with a greater percentage of the votes counted, published partial results showed the Liberals with 31 and Labour on 30.
Geert Wilders` Party for Freedom (PVV), which demands an end to immigration from Muslim countries and a ban on new mosques, took its number of lawmakers from nine in the last Parliament to 24, and could hope to enter a coalition government.
The far-right leader with his distinctive shock of fair hair called the result of Wednesday`s elections "magnificent".
"The impossible has happened," he told a televised party gathering. "We are the biggest winner today. The Netherlands chose more security, less crime, less immigration and less Islam."
Pushed into fourth place was the Christian Democratic Action party of Prime Minister Jan Peter Balkenende. The CDA, which has been in almost all Dutch governments since World War II, lost 20 seats to end at 21, and was the big loser in the election.
Balkenende, who had headed a centre-left coalition since 2007, acknowledged defeat by resigning both his party`s leadership and his seat in Parliament.
"I have informed the party chairman that I will lay down my party membership with immediate effect," said Balkenende, 54, adding that he was taking "political responsibility" for the state of affairs.
The Liberals, who had 21 seats in the outgoing Parliament, had topped opinion polls for several weeks.
Labour lost two seats compared with the previous elections in 2006.
The election was the first in a eurozone country since the Greek financial crisis erupted and has been closely watched to see how the public reacts to Europe`s wave of austerity.
The Liberals had led pre-election polls with their promise to cut public spending by about EUR 45 billion (USD 54 billion) over the next four years and by EUR 20 billion a year from 2015. But their support appeared to drain away in the final 48 hours of lobbying.
Rutte had also promised to eradicate the public deficit, which was 5.3 percent of GDP last year, shrink the government and Parliament, lower income taxes and cap civil servant pay rises while raising the retirement age by two years to 67.
Official results will be released next Tuesday.