"Today we've written a new chapter in our nation's political history," Lugo said, although he stopped short of claiming victory.

 

Full results could take up to two weeks to be announced but firecrackers resounded in the capital Asuncion and cars clogged streets and honked their horns to celebrate what looked like Lugo's imminent victory.

 

Thousands of Lugo supporters rallied in a central square.

 

Paraguay's 2.9 million eligible voters cast ballots for a new congress as well as a president on Sunday.

In depth


Q&A: Elections in Paraguay

Before the polls opened, Lugo had said that his Patriotic Front for Change coalition appealed to Paraguayans from across the political spectrum.

"I am not of the left, nor of the right. I'm in the middle, a candidate sought by many," the 56-year-old Lugo said as campaigning drew to a close.

The Patriotic Front for Change consists of about 20 Indian, peasant and union organisations - from left-wing groups to the conservative Radical Authentic party, Paraguay's largest opposition group.

Paraguay has gradually implemented democratic policies since Alfredo Stroessner, an anti-communist general, was removed from power in 1989.

Promised land reforms

And Lugo has promised to implement policies designed to improve the lives of ordinary Paraguayans, causing big landowners to be concerned.

Ovelar would be Paraguay's first female
president if she wins [Reuters]
Less than two per cent of the population owns more than 90 per cent of the land, and about 40 per cent of people live in poverty.

"We have 300,000 families without land and they have the constitutional right to own the soil they live on," Lugo has said.

Ovelar, who would become Paraguay's first female president if she came out on top, had pledged to steer the ruling party in a new direction, to the benefit of all in the country.

The former education minister and protege of Nicanor Duarte, the outgoing president, had appeared confident as she cast her ballot, promising to lead the nation to "unprecedented economic growth".

The exit polls put Lino Oviedo, a former army chief, in third place behind his two rivals.