Lithuanian opposition parties to form coalition government

VILNIUS, Lithuania (AP) - Opposition Social Democrats won Lithuania's parliamentary election on Sunday after campaigning on promises to reverse unpopular austerity policies and boost social spending in the recession-scarred Baltic state.

Party leaders agreed late on Sunday to form a coalition government with two other centre-left opposition parties that have also called for a larger government role in the economy after four years of tight budgets aimed at avoiding bankruptcy and paving the way for the euro.

The election result was a blow to Prime Minister Andrius Kubilius, whose conservative party, Homeland Union-Christian Democrats, finished second in the poll.

Mr Algirdas Butkevicius, the Social Democrats' leader and the likeliest prime minister candidate, said his party was ready to create a coalition with two populist parties - the Labour Party and Order & Justice.