By Jonathan Head BBC Tokyo correspondent

For DPJ candidate Yoshinori Suematsu, who won his seat, it had been a good night.

Our party has really showed they are the reliable, credible opposition party Yoshinori Suematsu DPJ candidate

"I felt some sort of disappointment, but we got so many seats... our party has really showed they are the reliable, credible opposition party," he said.

As the ballot boxes were broken open and the votes counted, it became clear that people were deserting the governing Liberal Democratic Party, which has ruled them for nearly half-a-century, though not yet in sufficient numbers to keep the LDP from office.

Over at the LDP headquarters there was celebration too, as each victory was reported.

But the mood was more subdued.

Two party contest

Mr Koizumi helped to stick red roses on a huge white board to show their progress.

This election was to decide whether the government should change, and our coalition has won a clear majority, so we can say we won the election Junichiro Koizumi Japanese Prime Minister

But they weren't doing as well as expected and the Prime Minister was left to put a brave face on what had been a less than convincing endorsement of his government.

"This election was to decide whether the government should change, and our coalition has won a clear majority, so we can say we won the election," said Mr Koizumi.

For the first time, in this election the voters were presented with a genuine two-party contest, both promising to reform Japan's business and political culture.

Many found it hard to choose between them.

"It isn't possible for anyone to carry out real reforms in less than three years," said one voter, who had backed Koizumi for another term.

"Japan's been ruled by the LDP for too long," said another.

"We need change and the LDP can't do it alone. We need to give the DPJ a chance."

Mr Koizumi's failure to translate his huge personal popularity into votes is a setback for the party.

It now faces a credible rival for power in the opposition DPJ.

Even Mr Koizumi acknowledged their success, saying the people had shown that they want a strong opposition party.

The Prime Minister had campaigned on his record as a reformer, but much of the LDP disapproves of his plans for privatisation and subsidy reduction.

It is often said here that the real opposition to Mr Koizumi is from within his own party.

This disappointing result may encourage those opponents to try to block his reforms.