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Czech left poised to win election, may face tough coalition talks

* Social Democrats hope to form minority government

* New protest parties also expected to score well

* Voting ends at 1200 GMT, results due later on Saturday

By Jana Mlcochova

PRAGUE, Oct 26 (Reuters) - The main opposition centre-left Social Democrats looked set to win most votes in a Czech parliamentary election ending on Saturday but new protest parties were also expected to do well, complicating the formation of a new government.

Opinion polls predict Bohuslav Sobotka's pro-European Union Social Democrats will win about 25 percent of the vote as Czechs punish centre-right parties, in power for most of the past seven years, over painful budget cuts and corruption scandals.

A leftist government led by former finance minister Sobotka would slap new taxes on banks, utilities and high earners to pay for social programmes and help keep the budget deficit below the EU's prescribed level of 3 percent of national output.

The Social Democrats, out of power since 2006, aim to form a minority government backed in parliament by the Communists, heirs to the totalitarian party that lost power in the 1989 "Velvet Revolution". It would be the first time the far-left party has had any share in power in the post-communist era.

Financial markets have mostly ignored the election thanks to the Czech Republic's economic stability, underpinned by low public debt load and the lowest borrowing costs in emerging Europe, but they may be rattled by an uncertain outcome and the risk of drawn-out coalition talks.

Polls opened at 1200 GMT on Friday and close at the same time on Saturday. Complete results are expected to be known by Saturday evening.

"I voted for a left-wing party because the right-wing parties have discredited themselves. They played unfairly," said Jan Klepl, a Prague resident in his 50s.


The snap election was called after centre-right prime minister Petr Necas resigned in June in a scandal over alleged illegal surveillance and bribery.

His Civic Democrats are tipped to win only 6.5 percent and its former coalition partner, the conservative Top09, 9 percent.

Anger over sleaze in the central European country of 10.5 million people gave a big boost to new protest parties in the final weeks of the election campaign, raising the prospect of prolonged haggling over a new coalition between the Social Democrats and smaller groups in the coming weeks.

The biggest of the new parties is ANO, set up by Forbes-listed billionaire businessman Andrej Babis, which polled at 16 percent in the latest opinion polls.

"What I want from this election is that this outrageous mess finally ends. I have voted for ANO. I want a change. Babis seems capable," said Petr, a doctor who declined to give his surname as he cast his ballot in Prague.

Babis's anti-graft message has struck a chord with voters who seem willing to overlook his pre-1989 membership of the Communist Party and links to the then-secret police.

"The current parties have messed it up. They all lie just to protect each other," said Vilem Zajicek, 50, making clear he was voting for one of the new groupings.

Sobotka's hopes of becoming prime minister will hinge not only on the smaller parties entering parliament.

President Milos Zeman, himself a former Social Democrat prime minister, has made clear he expects to have a say in the post-election negotiations.

Zeman's position will be all the stronger if the margin of the Social Democrats' victory is relatively modest and if more of the newer parties - including a small leftist grouping that strongly backs Zeman - make it into parliament.

Zeman has long disliked Sobotka and may try to negotiate a coalition headed by another Social Democrat, analysts say.