Exit polls suggest the ruling Christian Democrats are on course for a narrow win.
The failure of any party to win a clear majority means that the Netherlands may have a drawn out process of coalition building before any combination of parties can take power.
Gerrit Zalm, finance minister and member of the free-market Liberal party, Balkenende’s current government partner, said: “It’s chaos. It is extremely difficult to distil a government out of these results.”
The other alternative is to form a “grand coalition” centring on the two largest parties.
Smaller parties triumph
One of the biggest winners was Geert Wilders who has campaigned on an anti-immigrant message.
“We are a normal party that wants lower taxes and tougher sentences, but we are also proud of our culture and against the rise of Islam in Dutch society,” he said.
“There are enough Muslims in the Netherlands and enough mosques.”