Dutch voters have overwhelmingly backed pro-European pragmatism, electing centrist parties committed to debt-busting austerity and rejecting the anti-EU extremism of Geert Wilders.
Prime Minister Mark Rutte claimed victory early on Thursday for his conservative VVD party in national elections
widely seen as a referendum on the Netherlands' commitment to Europe.
With 92 per cent of municipalities reporting, the VVD was set to take 41 seats in the 150-member Dutch parliament, two more than its largest rival, the centre-left PvdA Labour Party.
Rutte said Labor leader Diederik Samsom, a former Greenpeace activist, had called him to concede.
"Tonight let's enjoy it, and tomorrow we have get to work to make sure a stable Cabinet is formed as soon as possible," Rutte told cheering supporters at a beachside hotel in The Hague.
"Then I'm going to get to work with you to help the Netherlands emerge from this crisis," he said, referring to Europe's debt crisis, which has left the Dutch economy in the doldrums.
The result means that Rutte will be called upon to form a new coalition that would keep the eurozone's fifth largest economy closely allied with European economic powerhouse Germany.
That means that if the two main parties agreed an alliance, the VVD and Labour would have 80 seats, a thin majority in the 150-seat parliament - meaning that a coalition would require more partners.
The more hard-left Socialist Party was set to win around 16 seats and Wilders' PVV just 15 seats, a sharp drop from its previous tally of 24, the partial count said.
'Party' in Brussels
Samsom received a raucous welcome at Amsterdam's Paradiso theatre where he was greeted by hundreds of his supporters.
"The Netherlands needs a stable government as soon as possible," Samsom said. "We would like to participate in that government, as long as tonight's results can be faithfully represented in the new cabinet's programme.
Foreign Minister Uri Rosenthal told the AFP news agency at the VVD party that the failure by former ally Wilders showed the Dutch were not extremists.
"It's very explicit that the Dutch don't like a very extreme European stand. We're a member of the EU and we should stick to it for many years to come," he said.
Wilders, who brought down the last government in April after refusing to approve an austerity-driven budget, is not expected to play any role in this coalition.
"I'd rather have stood in front of you with good news," a visibly shaken Wilders told his party's gathering in The Hague, wiping a solitary tear from his eye. "In Brussels they are having a party ... That's a pity."
"Tomorrow we will lick our wounds," he said. "This is not the end of the struggle."
The PVV vowed to pull out of the euro and the EU itself if they came to power. But many Dutch voters and the political mainstream decided that Wilders was simply unreliable.
'Centre of Europe'
Fiscally prudent Rutte's government has been allied to German Chancellor Angela Merkel, while Samsom's calls for stimulus echo those of France's Socialist President Francois Hollande.
Both parties had lashed out at the EU status quo during campaigning, but the Dutch export-based economy could not afford to call into question membership in the bloc, where it sends 75 per cent of its exports.
Many Dutch citizens are fed up with bailing out indebted eurozone members while swallowing their own budget cuts, but voters had nevertheless been expected to shun anti-EU parties for the mainstream.
"The results show a hard knock against eurosceptic parties. Whatever the outcome, the Netherlands will have a government that that will return smack to the centre of Europe," Thys Berman, leader of the PvdA's delegation at the
European Parliament told the AFP news agency.
Final results will be announced by the Electoral Commission on Thursday, but it will take weeks - if not months - for a new coalition to be formed.