By Francois Murphy
VIENNA (Reuters) - Austria will provide a new gauge of the populist wave sweeping Western democracies on Sunday, as the divided country holds an election that could deliver the first freely elected far-right head of state in Europe since World War Two.
The knife-edge presidential run-off is all the more dramatic for being a re-run of an election held six months ago - before Britain chose to leave the European Union and Americans elected Donald Trump as president - offering an indication of whether popular anger at the political establishment has grown.
When Norbert Hofer of the anti-immigration and anti-Islam Freedom Party (FPO) narrowly lost the original run-off in May with 49.65 percent of the vote, European governments breathed a sigh of relief. Far-right parties like France's National Front cheered the record performance.
That result, however, was overturned due to irregularities in the counting of postal ballots. Opinion polls suggest the re-run between Hofer and former Greens leader Alexander Van der Bellen is too close to call and could again come down to postal votes, meaning the final result might come as late as Tuesday.
Polling stations opened on a cold, crisp Sunday morning. The first projections are due shortly after 5 p.m. (1600 GMT), once the last polls have closed. No turnout figures will be released before then, the Interior Ministry said.
A Hofer win would raise the prospect of two near-simultaneous blows to Europe's political establishment. Italy is holding a referendum on Sunday on constitutional reform that could decide the political future of Prime Minister Matteo Renzi, who has promised to resign if he loses.
Austria's president traditionally has a largely ceremonial role, but Hofer has made clear he wants to be an interventionist head of state, threatening to dismiss a government if it raises taxes and calling for referendums on a range of issues, even though referendums are beyond the job's remit.
The president also plays an important part in forming coalitions. Van der Bellen has said he would try to prevent an FPO-led government even if it won an election. The FPO is running first in polls with support of roughly a third of voters, with parliamentary elections due in 2018.
What influence Trump and Brexit have had on Austria is unclear, but the fault lines are similar - blue-collar workers have largely backed Hofer, the highly educated favor Van der Bellen.
Van der Bellen, 72, has put Brexit at the heart of his campaign, arguing that Hofer wants Austria to hold its own "Oexit" referendum, putting jobs at risk in the small, trade-dependent country.
"It's a question of Austria being a firm member of the European Union or not," he told reporters after voting in Vienna, referring to the fact Hofer initially said Austria could hold its own referendum within a year, before backing down.
After casting his ballot in his eastern hometown of Pinkafeld, Hofer, 45, denied wanting to secede from the EU but did not explicitly rule out a referendum.
"I want to commit myself to changing this Union in a positive way and I don't want Austria to leave the European Union, that I have to say very clearly," said Hofer, who says he wants the bloc to be an economic rather than political union.
Austria has for decades been dominated by two centrist parties - the Social Democrats and conservative People's Party - that are once again in coalition, and anger at that entrenched duopoly has fueled support for the far-right FPO, which says it wants to end the two parties' grip on power.
This is the first time a president will not have come from either mainstream party, but Van der Bellen has said that on many points he intends to follow the example of Heinz Fischer, the last elected president and a Social Democrat.
The country, which stretches from Slovakia to Switzerland and borders Germany, was swept up in Europe's migration crisis last year, stoking unease among many voters already concerned about globalization and rising unemployment, playing into the FPO's hands.
"We have a government in Austria which is really not good right now. They don't work, they fight," said Helga Forster, a retired human resources manager, after voting in Vienna.
"Blue-collar workers think Hofer and (FPO chief Heinz-Christian) Strache will come and we will have paradise, which is not true, absolutely not," she added.
Whatever the outcome, weary Austrian voters hope it will at least bring to an end an election that has dragged on for almost a year after a comedy of errors that prompted some Austrian media to call the country a "banana republic".
The result of the May 22 run-off was overturned, mostly due to election officials cutting corners as they raced to complete the count. The re-run was then postponed because the glue on the envelopes for some postal ballots did not stick.
(Additional reporting by Sasa Kavic and Branko Filipovic in Pinkafeld, Austria and Michael Shields in Vienna; Editing by Susan Fenton and Pravin Char)