Icelandic leader struggles to stay in power

ICELAND: Europe's longest-serving prime minister, Mr David Oddsson, struggled yesterday to hold on to power in Iceland.

ICELAND: Europe's longest-serving prime minister, Mr David Oddsson, struggled yesterday to hold on to power in Iceland.

He is facing a strong leftist challenge which could see the island's first woman prime minister.

Mr Oddsson's ruling conservatives held a wafer-thin lead in the elections, held on Saturday, but the vote was so close that it was unclear who would form the next coalition government.

With 85 per cent of votes counted, Mr Oddsson's Independence Party was in the lead with 33.7 per cent - a poor showing for a party which has ruled the island for 50 of the last 70 years.

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Close behind at 31 per cent was the leftist Social Democratic Alliance, fielding as its candidate for prime minister Ms Ingibjorg Solrun Gisladottir, a popular former major of Reykjavik.

This may leave the balance of power with Mr Oddsson's present junior partners, the rural Progressive Party, which has 17.8 per cent of the vote and is wavering between the rival suitors.

"It is clear from the results that the people want the Progressive Party to continue in the government," said party leader and Foreign Minister Mr Halldor Asgrimsson.

In the past, election winners in the 63-seat Althing have formed a coalition, which then names a prime minister. However, the Social Democrats broke with tradition and fielded Ms Gisladottir as their candidate for prime minister.

Since Mr Oddsson, a poet and playwright, came to power in 1991, Iceland's 262,000 people have seen their incomes rise higher than most European nations, and the island which relies heavily on fishing has become a tourist destination.

Mr Oddsson promotes himself as the guarantor of economic growth, and promises big cuts in income taxes. Ms Gisladottir proposes reforms to welfare and a deregulated fishing system.