By Sergio Goncalves, Catarina Demony and David Latona
LISBON (Reuters) -Portugal's centre-right Democratic Alliance (AD) won Sunday's general election, its leader Luis Montenegro said, though it was unclear if he could govern without the support from far-right Chega, with whom he again refused to negotiate.
Chega's parliamentary representation more than quadrupled to at least 48 lawmakers in the 230-seat legislature, giving the combined right a majority.
Earlier, Montenegro's main rival, Pedro Nuno Santos, conceded defeat after his left-leaning Socialist Party (PS), in power since 2015, came in second by a razor-thin margin. He ruled out supporting the AD's platform which includes across-the-board tax cuts.
"The AD won the election," Montenegro told a crowd of ecstatic supporters in the early hours on Monday, adding that it was crucial for parties in the new parliament to act responsibly and "comply with the wish of the Portuguese people".
President Marcelo Rebelo de Sousa still has to formally invite the AD leader to form a government, which Montenegro said he expected to happen.
While reiterating his election promise not to rely on the right-wing populists for support to govern, he expressed hope the PS and Chega "do not form a negative alliance to prevent the government that the Portuguese wanted".
The AD and its conservative allies in the insular Madeira region won a total of at least 79 seats, ahead of the PS's 77.
Four seats were yet to be attributed after the final count of ballots from abroad.
The PS had trailed the AD in most opinion polls since Socialist Prime Minister Antonio Costa resigned in November amid a corruption investigation.
Santos said his party would now lead the opposition, which could not be left in the hands of Chega.
The far-right party campaigned on an anti-establishment message, vowing to sweep away corruption and expressing hostility to what it sees as "excessive" immigration.
Chega leader Andre Ventura told reporters Sunday's vote "clearly showed that the Portuguese want a government of the AD with Chega". He earlier said Montenegro would be responsible for any political instability if he continued to refuse to negotiate.
At the AD election night party, supporter Paula Madeiro said there was "no doubt that instability will be constant".
The PS and the Social Democratic Party (PSD), which helms the newly created AD, have alternated in power since the end of a fascist dictatorship five decades ago.
Alexandra Ferreira, a 21-year-old law student and member of the Socialist Party, said she was "very sad" with the results because of the far-right's growth. She said it showed that "we have a society with no memory" in reference to the dictatorship.
Issues dominating the campaign in western Europe's poorest country include a crippling housing crisis, low wages, sagging healthcare and corruption, seen by many as endemic to the mainstream parties.
Still, under the Socialist leadership Portugal has grown at solid annual rates above 2%, and posted budget surpluses of late, using the cash to slash the public debt below 100% of GDP and winning praise from Brussels and investors, who do not expect the AD to abandon the path of fiscal prudence.
(Reporting by Sergio Goncalves and Catarina Demony, Writing by Andrei Khalip and David Latona; Editing by Giles Elgood and Stephen Coates)
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