The far right Serbian Radical Party (SRS) has won more than 27.5% of Sunday's vote and would become the strongest single party in the 250-seat parliament, the independent Centre for Free and Fair Elections (CESID) said.

And the Socialist Party of a former Yugoslav president now facing war crimes charges, Slobodan Milosevic, just scraped past the minimum threshold of 5%. It could join the Radicals with a third party to form a majority.

Milosevic and Seselj are in custody at the UN war crimes tribunal at The Hague, where they are facing multiple charges over their roles in the Balkan wars of the 1990s, but their mandates can be taken by other party members.

"Technically speaking Milosevic can be a deputy, but our party is yet to decide who is going to take up the seats," said Socialist Party official Ivica Dacic.

CESID spokesman Marko Blagojevic said the Socialists and the Radicals could only "put Milosevic's and Seselj's photo on the seats in the assembly" if they chose not to replace them with other candidates.

Democrats challenged

Final official results are not expected until Wednesday, but CESID's partial returns showed democratic parties that were touted to win a majority in coalition would not have it so easy.

Former Socialist leader Slobodan
Milosevic is on trial for war crimes

CESID said the Democratic Party of Serbia (DSS) of former Yugoslav president Vojislav Kostunica would be the second strongest party in the parliament with 17.4% of the vote.

The Democratic Party (DS) of late prime minister Zoran Djindjic, who was assassinated by a mafia sniper in March, would win 12.7% and another moderate reformist group, the G17 Plus under liberal economist Miroljub Labus, would gain 11.4% of the votes.

With no party or alliance taking a clear majority, all eyes will focus on the Serbian Renewal Party of veteran campaigner Vuk Draskovic, which CESID predicted would win 8.2% of the vote.

Hopes dashed

Whatever the make-up of the new government, hopes that Sunday's election would end months of political instability and unblock reforms deemed vital for Serbia's entry to the European Union and NATO faded quickly after polls closed.

A nationalist government under the Radicals would lead to international isolation and an end to Serbia's halting progress towards Europe, EU foreign policy envoy Javier Solana warned in Belgrade earlier this month.
 
The radicals have promised to suspend all cooperation with The Hague tribunal and protect communist-era jobs from Western-style market liberalisation.

But foreign diplomats in Belgrade said they would commit political suicide if they reverted to the nationalist past and tried to turn back the clock on democratic reforms.
 
The incumbent democratic alliance, which helped oust Milosevic from power in 2000 and ended the country's international isolation during the 1990s, split last year and collapsed after the assassination of Djindjic in March.