BELGRADE (Reuters) - Serbia's incumbent liberals and right-wing opposition were tied for control of the Balkan country on Sunday after knife-edge elections in which the party of late Serb strongman Slobodan Milosevic emerged as kingmaker.
The opposition Serbian Progressive Party (SNS) claimed victory and said it would open coalition talks without delay. But the results suggested the liberal Democratic Party, in power since Milosevic's ouster in 2000, was better placed to find allies for a new government.
The SNS won 24.7 percent, ahead of the Democrats on 23.2 percent, according to a projection by pollsters CESID.
With 16.6 percent of the vote, the third-placed Socialist Party (SPS), once led by Milosevic, will likely cast the crucial vote to decide who forms Serbia's next coalition government, and is widely tipped to pick the Democrats.
They were partners in the outgoing reformist coalition that has steered Serbia to within a whisker of talks on joining the European Union.
"There is huge blackmailing potential for the SPS," said analyst Zoran Stojilkovic. "They are closer to the Democrats and they will have huge demands."
"The likeliest outcome is that the pro-European coalition will continue," he said. "It's just a question of the make-up."
Democratic Party leader Boris Tadic, Serbia's president since 2004, will enter a run-off for the presidency with Tomislav Nikolic of the SNS on May 20. Tadic won 26.7 percent in the presidential election, with Nikolic second on 25.5 percent, CESID said.
Under the constitution, the prime minister is more powerful than the president.
"We have won the most votes," Nikolic told a news conference. "We want to start negotiations tomorrow on forming a new government."
But the result, if it stands, will mark an upset after opinion polls ahead of the vote suggested the SNS would beat the Democratic Party by a wider margin.
Nikolic was once demonised by the West as Milosevic's spiritual heir but says he now shares the goal of taking Serbia into the EU.
Under the Democratic Party, Serbia closed a dark chapter with the arrest and extradition of Bosnian Serb genocide suspects Radovan Karadzic and Ratko Mladic, and in March became an official candidate for EU membership.
But there is widespread anger at the outgoing government over an economic downturn that has driven unemployment to 24 percent and weakened the dinar. The average Serb takes home 380 euros per month.
Fellow ex-Yugoslav republic Croatia joins the EU next year, driving home for many Serbs just how far they have fallen behind. The Democratic Party has also been dogged by a widely-held perception of elitism after more than a decade in power.
"The Democrats had their chance and they failed miserably so now it's time for a change," said 59-year-old Belgrade nurse Olga Nikolic, who voted for the opposition.
Additional reporting by Zoran Radosavljevic in Belgrade and Branislav Krstic in Mitrovica; Writing by Matt Robinson; Editing by Andrew Roche