A four-party centre-right coalition has won Sweden's parliamentary elections, ending 12 years of Social Democratic minority rule.
"The Swedish people have voted for a new government," Fredrik Reinfeldt, leader of the conservative Moderate Party, told enthusiastic party supporters late on Sunday.
Prime Minister Goran Persson of the Social Democrats admitted defeat minutes later, calling the election "a setback".
"When the votes are counted we can see that we are in minority," Persson said after his party dropped from 39.8 per cent in 2002 to 35.3 per cent, the party's poorest showing in decades, according to the tally released by the Election Authority.
Persson announced that he planned to step down as Social Democrat leader at an extra party conference in March 2007.
The 57-year-old Persson has been premier for the last 10 years and was named leader of the Social Democrats in March 1996.
The opposition Alliance for Sweden coalition was formed two years ago in a concerted attempt to challenge the Social Democrats.
Reinfeldt and the leaders of the other three alliance parties said they would meet to discuss the composition of a new government, expected to be presented on October 6.
With almost all of 5,783 districts counted, the alliance scored 48.1 percent compared to 46.2 per cent for Persson's ruling Social Democrats and their parliamentary backers, the Green Party and the Left Party.
Translated into seats, the four-party Alliance for Sweden would have 178 in the 349-seat parliament compared with 171 for the Social Democrats and their allies.
During his three years as leader, Reinfeldt has revamped the party, moved it more to the centre and played a key role in forging the two-year-old opposition alliance with three other non-socialist parties - the Centre Party, the Liberal Party and the Christian Democrats.
Reinfeldt, 41, underlined that the election victory was the result of "a joint effort" by the four parties.
Despite a favourable economy, the Social Democrats lost votes, suggesting that the electorate was weary of the party's rule, observers said.
In all, 6,891,172 voters were eligible to participate in the parliamentary elections. Voter turnout was about 80 per cent.