Sweden’s centre—right government heads into Sunday’s election with a commanding lead in the polls, boosted by popular tax cuts and healthy public finances that stand out in debt—ridden Europe.

But Prime Minister Fredrik Reinfeldt’s chances of a historic re—election don’t only depend on defeating the opposition bloc led by the Social Democrats, who have lost their dominance of politics in the Scandinavian welfare state.

Mr. Reinfeldt’s four—party coalition must also survive a challenge by a small anti—immigration party, which hopes to play a kingmaker role by winning enough votes to deny either side a majority in Parliament.

“Those who like Sweden do not vote for the Sweden Democrats,” Mr. Reinfeldt said in the west—coast city of Goteborg. He urged voters to keep the party out of Parliament to ensure his alliance can maintain its majority.

The Sweden Democrats demand sharp cuts to immigration and have called Islam Sweden’s biggest foreign threat since World War II. Both blocs have ruled out relying on the support of the party, saying it represents xenophobic views that counter Sweden’s tradition of tolerance.

The Sweden Democrats say the other parties have been reluctant to discuss problems with the integration of immigrants, which make up 14 percent of Sweden’s population of 9.4 million.

Polls released a day before the vote suggested Mr. Reinfeldt’s majority will stand, though only a small surge for the Sweden Democrats could lead to a hung Parliament.

A survey by pollster Sifo showed the center—right bloc winning 183 of the 349 seats, compared to 166 seats for the opposition Red—Green bloc.

The Sweden Democrats narrowly missed the four percent bar to enter Parliament in the survey presented in the Svenska Dagbladet newspaper. The Sept. 15—16 poll of 1,941 people had an error margin of 0.9—2.1 percentage points.

A separate survey, by Synovate, showed the Sweden Democrats getting 5.9 percent of votes for 21 seats in Parliament. That would leave Reinfeldt’s center—right alliance with a fragile one—seat majority.

No error margin was given for the September 7—16 poll of 1,820 people, which was published in Stockholm daily Dagens Nyheter.

If the polls are correct, Mr. Reinfeldt would be the first centre—right leader to win re—election after serving a full term since universal suffrage was introduced in the 1920s.

His coalition ousted the Social Democrats in 2006 with vows to lower taxes for working Swedes while trimming welfare benefits. It has largely kept those promises, cutting taxes for all income brackets and abolishing the wealth tax, while tightening unemployment and sickness compensation.

Social Democratic leader Mona Sahlin, who aims to become the first woman to hold the prime minister’s office, says the government is dismantling the welfare system step by step and increasing the gaps between rich and poor.

“There is another path for Sweden,” Ms. Sahlin said, at a campaign rally in Stockholm for her Red—Green alliance. The Social Democrats have had to join forces with the Green and Left parties to have any chance of regaining power.

Mr. Reinfeldt has steered the country through the global recession without soaring budget deficits. Sweden’s export—driven economy is expected to grow by more than 4 percent this year, while the 2010 budget gap is on track to be the smallest in the 27—nation European Union.

Meanwhile, the Social Democrats have not enjoyed their habitual rebound after a record—low 35—percent showing in the previous election four years ago. Polls suggest an even worse result, possibly below 30 percent, on Sunday.

Cilla Thorell, a 42—year—old actress attending Ms. Sahlin’s rally, said the government tries to “whip” sick people back to work while giving tax breaks to the wealthy.

“I think it’s cynical and inhuman,” said Ms. Thorell, who supports the Green Party.

Gudrun Martinsson, a nurse from Linkoping, said she will vote for Mr. Reinfeldt’s Moderate Party because it is pro—business.

“I believe in free entrepreneurship and that everybody should have the opportunity to work,” she said.

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