Swedes have started voting in a parliamentary election with polls showing the left-leaning Social Democrats poised to return to power after eight years of centre-right rule in the country.

The party appeared set for a narrow election victory on Sunday with a platform of increased spending on job schemes, healthcare and schools after eight years of tax cuts.

That would be a return to normalcy in Swedish politics because the Social Democrats, who built the country's famed welfare state, have not been in opposition for this long since they first took power in 1920.

Prime Minister Fredrik Reinfeldt, who took office in 2006, is the longest-serving conservative leader in Swedish history.

BACKGROUND: Parties and issues in Sweden's elections

Though he has won praise internationally for steering Sweden's economy through Europe's debt crisis in relatively good shape, many Swedes worry his pro-market policies have undermined the welfare system.

Reinfeldt's centre-right coalition government has cut income and corporate taxes, abolished a tax on wealth, trimmed welfare benefits, eased labour laws and privatised state-owned companies, including the maker of Absolut vodka.

Meanwhile, the gap between rich and poor has grown faster in Sweden than in most developed countries, though it remains among the world's most egalitarian, according to the Organisation for Economic Cooperation and Development.

Even though the gap has narrowed in recent weeks, pre-election polls showed the opposition bloc headed by Social Democrat leader Stefan Lofven with a clear lead over Reinfeldt's coalition.

Coalition government expected

The Social Democrats, the largest single party polling about 30 percent, hope to rule with the Green Party.

But even if opinion polls are born out, they are likely to rely on winning support from the Left Party and possibly smaller parties in the current centre-right government to form a government.

Negotiations could be hard and protracted.

The polls also showed increased support for the anti-immigration Sweden Democrats, who may end up holding the balance of power in Parliament, and a  potential parliamentary debut by a feminist party.

The once-radical Sweden Democrats party has softened its image over the years but is alone in opposing Sweden's liberal immigration policy. In the lead-up to the elections, several of the party's candidates have been forced to resign after revelations of racist comments made in chat forums.

This year, Sweden expects up to 80,000 asylum-seekers from Syria, Eritrea, Somalia, Afghanistan, Iraq, and other countries, the highest number since 1992.

Source: Agencies