By Michele Kambas
ATHENS (Reuters) - Cyprus's ruling conservatives took the lead in Sunday's general election, results showed, while a far-right party won its first seats in the legislature amid voter disillusionment after a 2013 financial meltdown.
With the voting tally at 100 percent, and an unprecedentedly high abstention rate, the right-wing Democratic Rally party was ahead with 30.6 percent of the vote followed by Communist AKEL with 25.6 percent.
Compared to the previous elections of 2011, those two main parties on the Cypriot political scene suffered setbacks. AKEL's Communists lost up to seven percentage points while Democratic Rally lost 3.7 percentage points.
By contrast ELAM, an extremist party forged on the coat-tails of Greece's Golden Dawn, scraped past a newly-imposed 3.6 percent electoral threshold and won up to two seats, according to preliminary estimates.
"It's sort of a kindergarten version of Golden Dawn," said political analyst Hubert Faustmann, referring to the party formed in 2008. "All the big parties lost."
Cyprus has an executive system of government and the president is elected separately, but the vote on Sunday was seen as a popularity gauge for President Nicos Anastasiades, whose term expires in 2018.
Anastasiades represents Greek Cypriots in talks with Turkish Cypriots to reunite the island that was split in a 1974 Turkish military invasion triggered by a brief Greece-inspired coup.
Diplomats are cautiously optimistic a solution could be in sight for the long-running conflict.
ELAM disagrees with the vision of Cyprus reunited under a bi-zonal federal umbrella as part of a settlement. Other small parties share that view.
"For the first time, Cyprus will get nationalists in its parliament," Golden Dawn leader Nikos Mihaloliakos told Greece's parliament minutes after the exit poll results were released.
Sunday's election was the first since Cyprus required an international bailout in 2013, partly because of the exposure its systemic banks had to Greece's write-down of sovereign debt.
It introduced a 'bail-in' on clients deposits at one major bank and wound down a second, leaving thousands of disgruntled bank deposit holders.
"A lot (of the result) was dissatisfaction of the public with the bigger parties," said Faustmann. "Another reading could be that parliamentary elections in Cyprus are not that important, given the weakness of the Cypriot parliament," he said, referring to the power given to the executive.
The abstention rate in the election exceeded 30 percent, one of the highest in a national vote since the inception of the Republic of Cyprus in 1960.
The prospect of a high abstention rate was expected and officials during the day repeatedly appealed to eligible voters to exercise their democratic right.
"If this right is forfeited it gives others the right to decide for those abstaining ... if someone spurns that right, they shouldn't complain the next day," Anastasiades said.
By law, voting is compulsory but authorities have relaxed prosecutions in recent years.
(Writing by Michele Kambas; Editing by Tom Heneghan)