Winner unclear in Portugal's election, far-right soars

By Sergio Goncalves, Catarina Demony and David Latona

LISBON (Reuters) -The outcome of Portugal's parliamentary election was too close to call with counting almost completed on Sunday after a late surge by the incumbent Socialist Party (PS) put it neck and neck with the centre-right Democratic Alliance.

The far-right party Chega came third with over 18% of the vote, almost tripling its 2022 election result, likely giving the combined right a parliamentary majority, although the moderate Democratic Alliance (AD) has so far refused to negotiate with the populists.

By late Sunday, 99% of the ballots had been counted, while the tally from voting abroad still awaited.

Pending the final count, which will take several days to complete, the AD led by just 438 votes with 28.7% support.

A separate conservative outfit from the region of Madeira elected three lawmakers, which may help the AD's cause.

The Socialists' prospects of forming a government looked bleak, however, as the combined right will dominate the legislature.

Chega leader Andre Ventura told reporters Sunday's vote "clearly showed that the Portuguese want a government of the AD with Chega".

It campaigned on an anti-establishment message, vowing to sweep away corruption and expressing hostility to what it sees as "excessive" immigration.

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.

At the AD election night party, supporter Paula Madeiro said there was "no doubt that instability will be constant".

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 that ended in 1974.

Sunday's ballot was triggered by Socialist Prime Minister Antonio Costa's resignation amid a graft investigation four months ago.

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. 

(Reporting by Sergio Goncalves, Catarina Demony and David LatonaEditing by Andrei Khalip, Frances Kerry, Christina Fincher, Giles Elgood, Neil Fullick)