Swedish Prime Minister Fredrik Reinfeldt's centre-right ruling coalition was ahead of the red-green opposition, but remained shy of a majority in Sunday's national elections, dpa reported.
When 4,429 of 5,668 districts were counted the government was on 172 seats, three seats shy of a majority, in the 349-seat parliament. The red-green opposition had 157 seats, while the anti-immigrant Sweden Democrats were on 20 seats.
"We are ready to take responsibility, but this result is very uncertain," said Per Schlingmann, secretary general of the premier's conservative Moderate Party.
The Sweden Democrats were poised to enter parliament for the first time, clearing the 4 per cent hurdle for inclusion in parliament. In 2006 they scored 2.9 per cent.
"We are ready to cooperate with parties that are ready to work with us," said Erik Almqvist of the Sweden Democrats who could become a new parliamentarian. "We need to slash immigration from outside Europe."
Birgitta Olsson of the Liberal Party and minister for European Union affairs said the Sweden Democrats' results were "regrettable."
"We see a trend in Europe that xenophobic parties have success, and now they are here," she said.
Public broadcaster SVT's exit poll earlier suggested Reinfeldt's four-party coalition was on 49.1 per cent compared to 45.1 per cent for the opposition Social Democrats, the Green Party and the Left Party.
Reinfeldt, 45, had called for another four-year term for his government that comprises his conservative Moderate Party, the Centre Party, the Liberal Party and the Christian Democrats, citing the government's track record in tackling the impact of the financial crisis and fiscal responsibility.
A separate poll of 1,900 voters for commercial broadcaster TV4 also had the governing coalition ahead with 48.2 per cent, compared to 46.4 per cent for the red-green opposition.
Both Reinfeldt and Social Democrat leader Mona Sahlin, 53, have prior to Sunday's polls said they would not cooperate with the Sweden Democrats.
The Social Democrats seemed headed for a new electoral defeat. Both exit polls suggested the opposition Social Democrats were at some 30 per cent, their poorest result in decades. In 2006 the party polled 35 per cent.
"This uncertain parliamentary situation is bad for Sweden," said Sven Erik Osterberg, member of parliament for the Social Democrats and a former cabinet member.
Foreign Minister Carl Bildt of the conservatives, who had experience of leading a minority centre-right government from 1991-94 that was forced to negotiate with a populist party, said new budgetary rules had made it easier for a minority government to rule.
Some 7.1 million of Sweden's 9.3 million were eligible to vote.
A record 2.1 million voters had already cast postal ballots by Sunday, the Election Authority said, adding this could delay the final results.
In addition to national elections, voters are to elect 20 county council assemblies and 290 municipal assemblies.
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