Irish Prime Minister Bertie Ahern's Fianna Fail party is preparing for coalition talks after failing to win enough seats in Friday's election for an outright parliamentary majority.

With a handful of recounts continuing on Monday, it was clear that Mr Ahern had come within a whisker of an absolute majority, but had not managed to reach the 83 seats required.

Mr Ahern is now expected to form a government with his existing coalition partners, the Progressive Democrats, who also won extra seats.

There have been major changes, however, on the opposition benches.

Results

Fianna Fail: 80 Fine Gael: 31 Labour: 21 Progressive Democrats: 8 Sinn Fein: 5 Green Party: 6 Others: 14

The main opposition Fine Gael party has suffered heavy losses, while the nationalist Sinn Fein and the Green Party have both made sizeable gains.

"For the first time in the history of the world, the electorate put the government back in - and voted the opposition out," said Finance Minister Charlie McCreevy.

Fianna Fail has taken at least 80 of the 166 seats in the Irish parliament (Dail), while the Progressive Democrats had doubled the number they held to eight.

But Fine Gael turned in its worst performance since 1948 and lost a third of its seats.

Its leader, Michael Noonan resigned while the count was still going on.

Former IRA gun-runner Martin Ferris celebrates victory

The results also showed big gains for Sinn Fein, the political wing of the IRA, which won five seats. In one constituency, former IRA gun-runner Martin Ferris captured a seat held for more than 20 years by Dick Spring, a former Labour foreign minister.

But Mr Ahern indicated he was not prepared to share national government with the party while the IRA was still in existence.

He challenged Sinn Fein to persuade the IRA to disarm.

"Sinn Fein will have to go the rest of the way," he said.

"There cannot be ambiguity. You cannot have a position where you've some kind of allegiance and loyalty understanding with a paramilitary army."

Coalition building

Mr Ahern has two weeks before parliament reconvenes to build a coalition government.

Although the Progressive Democrats are the most likely partners, their leader has said their place in a coalition should not be taken for granted.

"We're not in business to keep any other party in office. We'll go into government only if we can get agreement on our policy objectives," said Mary Harney.

The government's popularity has been attributed to the economic boom Ireland has enjoyed in recent years, which saw income tax cuts as well as public spending increases.

"The blindingly obvious point is people actually like the approach that the present government brought about," said Mr McCreevy.

Three constituencies - Wicklow, Cork South Central and Cavan-Monaghan, are still awaiting recounts. One other cliff-hanger, in Limerick West, ended when Fine Gael's Michael Finucane conceded victory to his party colleague Dan Neville.