Iceland's ruling conservatives held a wafer-thin lead today in elections but the vote was so close that it was unclear who would form the next coalition government.
With 85 per cent of votes counted, the Independence Party of Mr David Oddsson, Europe's longest-standing prime minister, was in the lead with 33.7 per cent.
That was considered a poor result for a party that has ruled the volcanic island for 50 of the last 70 years. Close behind was the leftist Social Democratic Alliance with 31 per cent.
That 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 63-seat Althing assembly founded by the Vikings, a government is formed by parties able to form a majority coalition.
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 that relies heavily on fishing has become a trendy tourist destination.
Mr Oddsson promotes himself as the guarantor of continued economic growth - seen returning this year after a mild recession in 2002 - and promises big cuts in high income taxes.
Disappointed with the result, which included defeat in his own district of the capital, Mr Oddsson said that if he did return for a fourth consecutive term, it would be his last.