By Thomas Escritt
AMSTERDAM (Reuters) - Leaders of the Dutch ruling coalition pledged to remain in government on Thursday despite losing provincial elections that will leave them scrambling to command a majority in the country's Senate.
The local ballot determines the composition of the upper house because the winners get to chose new senators in May.
According to a forecast made after more than 97 percent of votes had been counted, the Liberal party of Prime Minister Mark Rutte and its Labour coalition partner together will lose almost a third of their seats in the 75-member upper house.
Even before the result, the two parties did not hold an absolute Senate majority, but were able to pass laws with the support of three "constructive opposition" parties.
Now, Rutte's government lacks a majority even with their support, meaning it will have to do deals with different parties if it wants to proceed with an ambitious reform of the tax system or pass a budget later this year.
"It's good that so many of the Dutch want this government to continue ... and that's what we will do," said Rutte, whose party looked set to remain the single largest in an increasingly fragmented political landscape, despite losing three of its 16 Senate seats.
Big winners from Wednesday's nationwide ballot included the Christian Democrat CDA party, who were vying with Rutte's Liberals for first place, as well as the socially liberal D66 party and the hard left Socialist Party.
One of the losers was the far right Freedom Party of anti-Islam politician Geert Wilders, which came just equal fourth despite leading in the polls earlier in the year.
It looked set to shed one of its 10 Senate seats, although it also became the biggest single party in the ethnically diverse industrial city of Rotterdam.
The Labour Party came off worst, deserted by many of its left-wing voters for backing the Liberals' austerity drive, which is designed to cut the budget deficit. It was forecast to fall from 14 seats to eight.
Labour leader Diederik Samson said he would plow ahead in government regardless: "We took this responsibility for four years, and we will stick to it."
CDA leader Sybrand Buma hinted that he might be prepared to lend his support to the governing coalition in the upper house.
"The government must adjust its course. It must listen to the Senate majority," he said, as his party looked set to become the second largest party in the Senate with 12 seats.
According to the latest forecasts, published in the early hours, the government and its three "constructive opposition" partners will have just 36 seats, short of the 38 needed.
(Reporting by Thomas Escritt; Editing by Crispian Balmer)