Georgian President Mikhail Saakashvili has conceded defeat in parliamentary polls that appear set to hand a shock victory to the opposition Georgian Dream coalition.
"It is clear that the [opposition] Georgian Dream has won a majority," Saakashvili said in a televised speech on Tuesday.
Bidzina Ivanishvili's Georgian Dream opposition coalition was leading Saakashvili's ruling United National Movement (UNM) by 53.19 per cent to 41.51 per cent after a quarter of electoral precincts declared results on Tuesday in the proportional ballot that will decide just over half of parliamentary seats.
A complex electoral system means that the ruling party could still take a large number of seats, however.
First-past-the-post votes in 73 constituencies will make up the remainder of the 150-seat parliament, and the opposition was ahead in partial counts from seven out of 10 such constituencies in its stronghold Tbilisi.
The showdown between the opposition and the Saakashvili's long-dominant party became increasingly bitter after a prison torture scandal prompted nationwide protests ahead of the vote in the Western-backed ex-Soviet state. The country has been ruled by the UNM since the 2003 "Rose Revolution".
|Supporters of opposition Georgian Dream party celebrate their victory in the parliamentary election [EPA]
Ivanishvili declared victory immediately after several exit polls suggested late on Monday that his coalition was either ahead or running neck-and-neck with the ruling party in the proportional-vote section of the contest.
"We have won! The Georgian people have won!" he said in a televised speech. Ivanishvili's supporters celebrated long into the night after exit polls offered them hope of victory with thousands of jubilant supporters gathering late at night in Tbilisi's central Freedom Square.
Cars full of more euphoric supporters raced up and down the capital's main street, sounding their horns, whistling and waving flags.
Saakashvili said that while it appeared the Georgian Dream coalition had won the majority in the proportional vote, he expected his party to do well in the single-mandate constituencies.
The elections are crucial for Georgia's future because its parliament and prime minister will become stronger and the presidency's powers will dwindle under constitutional changes that come into force after Saakashvili's two-term rule ends in 2013.
Before the torture scandal sparked by revelations of the brutal beating and rape of male prison inmates erupted last month, most opinion polls gave the ruling party a significant lead, but the outrage damaged its campaign.
"The elections were held in an unprecedentedly competitive environment and the final result will accurately reflect the people's will"
- Zurab Kharatishvili,
Central Election Commission chief
Turnout was 61 per cent, the Central Election Commission said.
"The elections were held in an unprecedentedly competitive environment and the final result will accurately reflect the people's will," the commission's chief Zurab Kharatishvili said in a statement.
Ivanishvili, who made his fortune through privatisation deals in Russia, had threatened to call mass demonstrations should Western observers fail to declare the vote fair.
The polls were a "litmus test of the way democracy works in Georgia," Anders Fogh Rasmussen, the NATO secretary-general, said on Monday.
Saakashvili's party controlled 119 of the 150 seats in the outgoing parliament and has dominated Georgia since the charismatic lawyer rose to power after the "Rose Revolution" that toppled the country's former leader, ex-Soviet foreign minister Eduard Shevardnadze.
He was praised for modernising reforms that brought Georgia back from the brink of economic collapse and tackled widespread corruption, but drew criticism for crackdowns on protesters and the country's disastrous defeat in a brief war with arch-foe Russia in 2008.