By Stephen Mangan
ASHBOURNE, Ireland (Reuters) - Irish Prime Minister Enda Kenny's Fine Gael party was on course to retain its seat in a by-election on Thursday, but its junior partner in government Labor was beaten into fifth place in a humiliating defeat.
Labor went into government for the first time since the late 1990s two years ago on a promise to end the previous administration's adherence to "Frankfurt's Way," an austerity plan the party said was dictated by the European Central Bank.
However the centre-left party has angered supporters by continuing with the tough austerity required under the country's EU/IMF bailout and its vote in the Meath East constituency collapsed to 4.6 percent from 21 percent last time out.
On 38.5 percent after the first count, Fine Gael's Helen McEntee looked set to win the seat left vacant when her father committed suicide, softening the blow for the coalition which would keep its record parliamentary majority even if she loses.
"I voted for Labor last time out but will never vote for them again," fumed Abigail Flores, a mother-of-two living in Ashbourne, a town 20 km north of Dublin where so-called "ghost estates" lie unfinished after a spectacular property crash. She had no interest in voting this time around
"I would have always voted for Labor and so would my parents and sisters but they've shown in the last two years that they're just spineless and are no different from Fine Gael or Fianna Fail. They don't actually stand for anything."
The centre-right Fianna Fail, which dominated Irish politics before losing three-quarters of its seats in humbling elections held after it signed up to the bailout, saw its support jump to 32.9 percent from 19 percent two years ago.
A rise of just four percentage points to 13 percent for Sinn Fein, the only major party rallying against austerity, showed the limited Irish appetite for the type of populist political movements making inroads elsewhere in Europe.
A lack of opposition to deep tax hikes and spending cuts has helped Ireland hit the targets set under its bailout and close in on getting off emergency EU and IMF assistance, a move cemented last month by a landmark 10-year bond sale.
But that has meant little to Labor's traditional support base of working class socialists and heavily unionized middle-class state workers. On Thursday, it even fell behind Direct Democracy Ireland, a party launched just four months ago.
"It's a difficult day for Labor, people are very angry out there and clearly the Labor Party has been singled out for the brunt of responsibility," Pat Rabbitte, a senior Labor minister, told the Today FM radio station.
"There's little point in trying to explain to the individual voter that bond prices are cheaper, that butters no parsnips as far as they're concerned."
Analysts said the loss poses little threat to the coalition and its austerity push as Labor, which has already seen five of its 38 MPs defect from the party, would be unlikely to leave government and force an election with support so low.
"It will make life a bit more uncomfortable for the Labor leadership but I can't really see what they can do to stem to flow other than to steady the nerves and hope that the economy turns around," said Eoin O'Malley, politics lecturer at Dublin City University.
"The problem for Labor is that if that happens, Fine Gael are likely to get the benefit and Labor will get the blame for anything that goes wrong. They're in a bad position but they should have know that when entering government in 2011."
A final result is expected at around 1900 GMT.
(Writing by Padraic Halpin; Editing by Toby Chopra)