The Swedish Moderates leader Ulf Kristersson on Friday said his party had reached a deal with the Christian Democrats and the Liberals to form a minority coalition government.

theanti-immigration Sweden Democrats, which emerged as the largest right-wing party in the September election, has agreed to support the government's formation but will not be a part of it.

What happens next?

Kristersson will become prime minister provided that a majority of Sweden's parliament, the Riksdag, does not vote against his appointment.

"The Moderates, Christian Democrats and Liberals will build a government and cooperate with the Sweden Democrats in parliament," Kristersson told reporters.

The right-wing bloc within parliament, including the Sweden Democrats, won by a slim majority in the last election, securing 176 seats in the 349-member parliament.

Social Democratic Prime Minister Magdalena Andersson, who heads Sweden's largest party,has acknowledged defeatbut continued in a caretaker capacity until a new government is formed. Although Andersson's party secured 30.33% for 107 seats, the leftist coalition failed to garner enough to form a majority.

The Liberals have said they do not want to rule in coalition with the Sweden Democrats, a party that was founded by far-right extremists in the 1980s and which is now the second-largest party in parliament.

Although minority governments are not unusual in Scandinavia, Sweden has never before had a government that relies on support from a far-right populist party.

The "confidence and supply" deal, involving the Sweden Democrats voting for government legislation where it is in agreement, would result in a minority government with only a very slender majority.

The incoming government immediately said it would construct new nuclear reactors to meet the country's rising electricity needs.

rc/fb (Reuters, AFP, dpa)