Conservatives to form Austrian government

Austrian Chancellor Mr Wolfgang Schuessel was looking to form a new government today after his conservatives won a landslide …

Austrian Chancellor Mr Wolfgang Schuessel was looking to form a new government today after his conservatives won a landslide victory in yesterday's elections that left Joerg Haider's far-right Freedom Party in tatters.

Mr Schuessel led his People's Party to its biggest electoral success in two decades at the polls and has signalled he may renew his partnership with the Freedom Party when he meets Austrian President Mr Thomas Klestil to discuss a new government.

But the Freedom Party, which former chairman Mr Haider had made into Europe's most successful far-right party with 27 per cent of Austria's vote in 1999, lost almost two-thirds of that support in a crushing defeat.

This time around, Austria's anti-immigration, eurosceptic party gathered a mere 10.2 per cent of the vote, a quarter of Mr Schuessel's 42.3 per cent.

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Mr Schuessel managed to woo Freedom voters disappointed at the far-right's in-fighting and policy squabbles. In his biggest coup, he recruited the Freedom Party's most popular figure, Finance Minister Mr Karl-Heinz Grasser.

Although Mr Schuessel has indicated his preference for a renewal of the outgoing centre-right coalition with the Freedom Party, he also said he was open to discussions with the other two parties, the Social Democrats and the Greens.

The leftist Social Democrats, who have formed most Austrian governments for the last half century, came in second place in yesterday's snap election with 36.9 per cent and appeared ready to remain in opposition. The Greens received 9 per cent of the vote, making them the smallest party in parliament.But coalition talks with the Freedom Party could be complicated, as party chairman Mr Herbert Haupt said he refused to be in a government with Mr Grasser, whom Mr Haider ousted in September in a dispute over a delay in promised tax cuts.