(For a TAKE A LOOK on Mexico, click [ID:nN25302940])

* PRI may control nearly half of seats in lower house

* Voters tired of recession and crime

* Peso down against the dollar (Adds quotes, detail, background)

By Catherine Bremer

MEXICO CITY, July 6 (Reuters) - A worse-than-expected congressional election defeat for Mexico's ruling conservatives has left President Felipe Calderon's economic reform agenda firmly in the hands of the opposition.

Voters tired of a recession and crime wave handed victory at Sunday's mid-term vote to the Institutional Revolutionary Party, or PRI, which has flourished in opposition since it was ousted in 2000 from seven decades of one-party rule.

Calderon's National Action Party, or PAN, moved Mexico into a new era of democracy with the victory over the PRI nine years ago but it has failed to create the jobs it promised, leaving millions to cross the U.S. border illegally in search of work.

Mexicans have praised Calderon's war on drug gangs, but are worried by a surge in brutal cartel murders and kidnappings, and Calderon's defeat now risks leaving him a lame duck.