Hungary's ruling left wing coalition has won the country's first parliamentary elections since it joined the European Union in 2004. The Hungarian Socialist Party and its liberal ally beat the center right opposition.
There were scenes of celebrations at the packed Budapest headquarters of the ruling Hungarian Socialist Party, which has made history.
For the first time since the demise of Communism in 1989 a Hungarian government has been re-elected.
Election officials said the Socialists and its liberal coalition partner Alliance of Free Democrats are expected to have around 210 seats in the 386-member parliament.
The main center right opposition party Fidesz and the smaller right-wing Hungarian Democratic Forum Party reportedly have 175. As soon as the results became known, Fidesz leader Viktor Orban acknowledged defeat and congratulated Socialist Prime Minister Ferenc Gyurcsany.
Mr. Gyurcsany told his supporters that his administration would create a more equal society amid concerns over social tensions in Hungary, which joined the European Union two years ago. "I believe in Hungary. I believe that we can build up a Hungary that will be open for everyone and where it doesn't matter where you are born in a small village or a town," he says. "We want to create a country where it is worthwhile to work and where you can get rich by using your talents and hard work."
The 44-year old Mr. Gyurcsany, a former Communist who became a self-made millionaire before returning to politics, considers British Prime Minister Tony Blair his political mentor.
Mr. Gyurcsany's left wing coalition has made clear it wants to embrace globalization and free market reforms while fighting for social justice.
While Western investors welcome the pro-business rhetoric of the Socialists, there is growing concern over the ballooning budget deficit which stood at around six percent of gross domestic product in 2006.
The deficit is the highest within the European Union and is a threat to Hungary's plans to meet the requirements to introduce the euro currency in 2010.
Sunday's celebrations were expected to be short-lived as some officials have already spoken off massive lay-offs among state workers and other tough social measures to reduce both the budget deficit and improve Hungary's competitiveness.