New era dawns for Denmark

Sweeping victory: Anders Fogh Rasmussen

COPENHAGEN, Denmark -- Danish election victor Anders Fogh Rasmussen says he expects to assemble a new coalition government by early next week.

Queen Margrethe officially appointed him as mediator in talks to determine the makeup of the next government, in which he is almost certain to become prime minister.

Talks were taking place on Thursday to set up the coalition. No one party won an overall majority but Liberal Party leader Fogh Rasmussen, 48, comfortably beat his rival -- and namesake -- Social Democrat Prime Minister Poul Nyrup Rasmussen.

"I will use the time needed to prepare a government programme," said Fogh Rasmussen, hours after Nyrup Rasmussen, 58, who had governed for nine years, formally resigned, although he will temporarily stay on as caretaker.

In Tuesday's vote, the Liberal Party and its supporters, including the anti-immigration Danish People's Party, got 98 seats in the 179-seat parliament, well above the majority of 90. Terms are for four years.

MORE STORIES Rise of Denmark's 'Mr Perfect'    RESOURCES At a glance: Anders Fogh Rasmussen    WEB SITE CNN.dk

With all votes counted, the Social Democrats and their governing coalition partners won 77 seats in all, down from 89. Official voter turnout among Denmark's 4 million voters was 87 percent, lower than earlier figures.

Analysts predict a Liberal-Conservative minority coalition government ruling with support from the right-wing populist Danish People's Party and the small centre Christian People's Party.

Immigration dominated the three-week campaign, but Fogh Rasmussen, 48, reiterated that the anti-immigration Danish People's Party would have no influence on the government's policies even though its support will be necessary.

Nonetheless he pledged to tighten immigration policies to protect the country's cradle-to-grave welfare system from being exploited.

"I want to stress again that there is in the Danish society no xenophobia, but there is a worry about the future of our welfare," he said. "What we are criticising is a system that has failed and that is being misused by some immigrants."

Nyrup Rasmussen's gamble on a snap election backfired

The outspoken Danish People's Party leader, Pia Kjaersgaard, 54, pointed out that her party -- now the third-largest with 22 seats -- was "in a favourable position."

"I'm convinced that we'll be in a position to negotiate" when it comes to tightening immigration laws and tougher prison sentences for violent crimes, she said.

The Liberals became the largest party for the first time since 1920 with 56 seats. Fogh Rasmussen, a former tax and economics minister, has moved his former hard-line rightist party towards the centre and said he would seek "a broad cooperation" in parliament. Nyrup Rasmussen, in office since 1993 and the EU's longest serving PM, made a tearful concession of defeat on Tuesday night. The two Rasmussens are not related.

Fogh Rasmussen told a TV interviewer of his plans for the first 100 days of office: "We want to reform hospitals, ensure better care of the elderly, increase maternity leave to one year... tighten policy regarding foreigners and, from day one, put a lid on taxes."

The defeat was a major rebuff to Nyrup Rasmussen, 58, who called the snap election in a gamble that voters would unite behind his nine-year leadership after the September 11 attacks on the United States.

Denmark is the second Scandinavian nation after Norway to oust ditch a Social Democratic government this year in favour of the centre-right. Norway's Labour Party, blamed for failing to update its cradle-to-grave welfare state, lost an election in September.

In Sweden, Social Democratic Prime Minister Goran Persson faces an election in September 2002. His party won just 36.6 percent of the vote at the last elections in 1998, the party's worst result since 1920.