STOCKHOLM (Reuters) - Swedish Prime Minister Stefan Lofven said on Thursday he expected the country's mainstream parties to be able to cooperate to exclude the far right after a snap election in March if no bloc wins a majority.
Lofven was forced to call a new vote just two months into his term after the anti-immigration Sweden Democrats, who with 49 seats in he 349-seat parliament nevertheless hold the balance of power, blocked the Social Democrat-led coalition's first budget this week.
But he was optimistic the two blocs could find common ground if March's vote does not break the parliamentary deadlock.
"I have a hard time seeing that after this situation ... parliament can't sit together at the negotiating table and ensure we achieve security, stability and development for the country," Lofven said on Swedish television.
He ruled out any cooperation with the Sweden Democrats who have been shunned by all Sweden's main parties since breaking into parliament in 2010.
The coalition of the Social Democrats and Greens and the center-right opposition bloc - which formed the last government - are running neck and neck in polls and the March vote could leave the Sweden Democrats still able to exercise an effective veto on who holds power.
They have threatened to bring down any government that does not tighten Sweden's generous immigration policy.
September's election returned one of Sweden's weakest governments in decades and Lofven repeatedly sought cross party support to neutralize the Sweden Democrats.
Lofven laid the blame for his budget defeat at the feet of the four-party Alliance opposition for refusing any deal that would have sidelined the Sweden Democrats, who want to cut the number of asylum seekers reaching Sweden by 90 percent.
He campaigned on a promise to draw a line under nearly a decade of tax cuts and privatization under the center-right, offering more spending on job creation, welfare and schools, paid for by tax hikes.
But his plans were scuppered when his budget was voted down in parliament this week.
Lofven said he was still willing to compromise to reach an agreement with the other mainstream parties, but would not say where he saw common ground.
Basking in their success after bringing down the coalition, the Sweden Democrats have said they want the March 22 vote to be a referendum on Sweden's generous immigration policies.
(Editing by Tom Brown)