Polish Prime Minister Jaroslaw Kaczynski has admitted defeat in Sunday's parliament elections. From Budapest, Stefan Bos reports the prime minister made the announcement after exit polls showed he lost to a liberal-leaning party that has pledged to withdraw Polish forces from Iraq.

Polish PM Jaroslaw Kaczynski speaks to supporters in Warsaw, 21 Oct 2007

Exit polls show the liberal, pro-business, Civic Platform Party benefited from Poland's largest voter turnout in years, with slightly more than half of the country's over 30 million eligible voters participating. About 44 percent of the ballots went to Civic Platform, putting party leader Donald Tusk in line to be the next prime minister.

Analysts say the party is likely to fall short of a majority in the 460-seat lower house of parliament. However, it is expected to form a coalition with the centrist Polish Peasants Party.

Speaking through an interpreter on EuroNews television, Tusk, 50, said he wanted to move the country in a new direction.

"We stood so that everybody, without exception, could feel comfortable in their homes, in their country. Those seeking happiness and satisfaction outside of Poland can believe that one day they can return home and that in this house, order will reign," he said.

Poland's Civic Platform's leader Donald Tusk celebrates first exit poll results, 21 Oct 2007

His government is expected to raise some eyebrows in Washington. As a campaign position, Tusk has said he wants to pull Poland's approximately 900 troops from Iraq, next year.

Tusk's center-right party has also suggested it could break the outgoing government's negotiations with the United States on hosting a missile defense system on Polish soil, unless Washington offers what it calls "sufficient security trade-offs."

On the economic front, Tusk has pledged to introduce the Euro currency by 2013 and to repair strained relations with Poland's European Union partners, especially Germany.

The tensions emerged during talks on a treaty governing the E.U., when Prime Minister Kaczynski demanded more voting power for Poland. He said his country would have a larger population than its current 38 million people, if the German Nazis had not killed millions during World War Two.

Although Prime Minister Kaczynski conceded defeat, he made clear, through an interpreter, his conservative leaning Law and Justice Party will remain a force in Polish politics.

"We didn't manage to fight this large front which was deployed against us. We must not forget that we won five million more votes, 50 percent more than in the last election, despite this unbelievable attack," said Kaczynski.

The outcome is a setback for Kaczynski and his identical twin brother, President Lech Kaczynski. They had called for elections two years ahead of schedule, after a major corruption scandal and the subsequent collapse of the shaky coalition, which also included a right-wing Catholic party and farm-based populists.