REYKJAVIK (REUTERS) - Icelanders, angry over a string of political scandals, ousted their centre-right government in an election that could pave the way for a charismatic young opposition leader to form a left-leaning coalition, final vote counts showed on Sunday (Oct 29).
With the defeat of incumbent Prime Minister Bjarni Benediktsson's coalition government, his main opponent, the Left-Green Movement's Katrin Jakobsdottir, is likely to get a chance to form a narrow majority in parliament.
Still, the composition of any coalition government remained uncertain, as the president had not yet mandated a party to form one.
The Nordic island of 340,000 people, one of the countries hit hardest by the 2008 financial crisis, has staged a remarkable economic rebound spurred by a tourism boom.
Mr Benediktsson called the snap election in September, after less than a year in government, as a scandal involving his father prompted the Bright Future party to drop out of his ruling coalition, citing a breach of trust.
The previous government was defeated last year following revelations in the Panama Papers about then Prime Minister Sigmundur David Gunnlaugsson's use of offshore tax havens.
In addition to the political scandals, a growing sense of inequality and unease about immigration in one of the world's most ethnically homogeneous nations have rattled a democracy known for its political and social stability.
After the final vote count, Ms Jakobsdottir, 41, of the Left-Greens stood to gain a narrow majority in parliament with three other opposition parties.
The result showed a Left-Green-led coalition was possible if they joined forces with the Social Democrats, the Progressive Party and the Pirate Party. Together, they would hold 32 of parliament's 63 seats.
"The opposition has a majority, so that's a message. But we've also talked about that maybe things should be done differently and create a broader government," Ms Jakobsdottir said in a TV debate on Sunday.
The Left-Greens want to reduce inequality and fund an increase in public health care, education and infrastructure spending by raising taxes for the wealthy and introducing a property tax.
The parliament will be split among eight parties. There are two new parties, and one of the parties in the current tri-party government failed to get enough votes to remain in parliament.
The Independence Party, the main partner in the current government coalition, lost 4 percentage points from last year's election to take 25 per cent of the vote. It remains the biggest party, but the election was the worst since 2009 for a party that has dominated Iceland's politics for decades, getting support of as much as 40 per cent of voters.
Asked during the TV debate if the Independence Party would get the chance to form a new government, Mr Benediktsson said: "I think so. We are the biggest party, and I think it's normal that we should be a part of a future government.
"We are attacked as a party that bears responsibility for certain things," he said. "We are in a new environment, and considering that I am happy with the result."
His party wants to reduce the national debt and cut taxes on individuals and businesses.
The Left-Greens came in second with 17 per cent, up 1 percentage point from last year's election, and its probable ally the Social Democrats came in third with 12 per cent, almost doubling its share.
"I think that the opposition with one extra party can create a really strong government," said Social Democrat leader Logi Einarsson, hinting at the possibility of a five-party government.
The new Centre Party, which was formed in September by former prime minister Gunnlaugsson, won 11 per cent of the votes.
The Pirate Party, which last year rode a wave of anger against the establishment to become the third biggest party in parliament, stood to get 9 per cent of votes in Saturday's election down from 14 per cent last year.