Finland's leftist Social Democrat party leader Antti Rinne has declared victory in Sunday's general election, after partial results showed his party winning by a tight margin with 17.8 per cent.
The nationalist Finns Party was in second place with 17.6 per cent, after more than 97 per cent of votes were counted.
"For the first time since 1999 we are the largest party in Finland. SDP is the prime minister party," Mr Rinne said.
The centre-right National Coalition of outgoing finance minister Petteri Orpo looks set to retain its seats with the Centre Party of outgoing prime minister Juha Sipila the big losers.
Mr Rinne would be Finland’s first leftist prime minister in two decades.
However, his ability to govern may be hampered by a surge in support for the nationalist Finns Party, riding a wave of anti-immigrant sentiment sweeping the Nordics.
The Finns scored rapid gains since the start of the year when cases of sexual abuse of minors by foreign men emerged.
Finns Party leader Jussi Halla-aho (47) cast his vote near his home in Eira, one of Helsinki’s most expensive neighbourhoods.
“As you probably know we have doubled our support in opinion polls during the past six months,” he said. “We want to reduce to as low as possible the kind of immigration that is, in our opinion, damaging to the public finances of our country and to the safety and security of people.”
Mr Rinne had earlier ruled out forming a government with the nationalists.
With the European Parliament election less than two months away, the Finnish ballot is being watched in Brussels. A strong result for the Finns Party could bolster a nationalist bloc threatening to shake up EU policymaking.
Anti-immigration parties have announced plans to join forces after the May 26th EU election.
Just as the Social Democrats are benefiting from a growing sense of insecurity among Finland’s older and poorer voters, the Finns argue the nation has gone too far in addressing issues such as climate change and migration at its own expense.
"We are going through a cultural shock in Finland. Part of the population is in a kind of state of shock amid all the change going on, and as a result they take the Finns Party's hand," said Karina Jutila, chief researcher at think tank e2.
The success of the Social Democrats would mark a departure for Finland and the region, where leftist parties have struggled in recent years, yielding some of their hold on the working class vote as nationalist parties have emerged.
In Sweden, prime minister Stefan Lofven has clung to power after his Social Democrats suffered their worst parliamentary election result in more than a century last autumn, enlisting the support of two liberal parties with a pledge to enact some right-wing policies.
In Denmark, which holds an election in June, the Social Democrats are gaining ground, in part after espousing the populists' anti-immigrant rhetoric.
Mr Rinne favours work-related immigration to compensate for Finland’s ageing population, but also allowing in some refugees on humanitarian grounds, as the country has done thus far.
The 56-year-old former union leader is also promising to raise taxes to fund welfare and combat economic inequality, which he says has risen under the centre-right coalition of prime minister Mr Sipila.
Many of his supporters value Finland’s generous welfare state and are unlikely to be put off by plans to raise taxes.
"I think the economy is very important right now and then the climate of course and then children's issues," said 33-year-old lawyer Elli Heino.
"The environment. I can't emphasise it enough," business manager Lotta Makinen (30) said.
Nineteen parties are running in the election, with eight of them holding seats in the parliament now, ranging from the environmentalist Green party, polling at 12.2 per cent, to the Feminist Party founded two years ago. – Reuters