By Bethany Bell In Vienna

The drubbing just received by the Freedom Party in Austria's elections marks a dramatic fall from grace for the party's far-right leader Joerg Haider.

Though he resigned as chairman two years ago - amid huge controversy over his extremist views on immigration - he has continued to pull the strings from behind the scenes.

Haider's party could yet be a junior coalition partner

But his party's support has now dropped by almost two thirds to just 10%.

There is shock and consternation among Freedom Party supporters.

They find it hard to believe that their party, once Europe's most successful far-right movement, has sunk to only 10%.

Around two-thirds of Freedom Party voters abandoned the party this time round, tired of the bitter in-fighting between the former party leader, Joerg Haider, and his colleagues in government.

Celebration

But the interim leader, Herbert Haupt, says Mr Haider is still important for the party.

Results (1999 results in brackets)

People's Party: 42.3% (26%) Social Democrats: 36.9% (33%) Freedom Party: 10.2% (26.9%) Greens: 9.0% (7.4)

"I think Mr Haider is a strong factor in the Austrian Government... Mr Haider needs no comeback. He is on top in Carinthia [where he is governor] and I think he will be in Carinthia on the top for the next years."

While the Freedom Party is in shock, its former coalition partners, the People's Party, are celebrating a landslide victory.

"The voters said clearly that the course this past government took and the work they did was obviously excellent work, because otherwise they wouldn't have given us so many votes," said the party's general secretary, Maria Rauch-Kallat.

The People's Party will now lead talks to form a new coalition with all of Austria's parliamentary parties, the Greens, the Social Democrats and the Freedom Party.

There has been speculation about a return to the old grand coalition with their partners, the Social Democrats, who came in second with 36%.

Coalition options

But the Social Democrats' leading candidate, the diplomat Wolfgang Petritsch says that's something his party is reluctant to do.

"I believe that the signs are very clearly for a right-wing, for the continuation of the right-wing coalition," he said.

"Of course, we are ready to talk and we will not be the ones to say no... but I think it's very clear that this is going to be a continuation of what we have seen now for the past two-and-a-half or three years or so."

If the Social Democrats do not join the next government, that would leave the door open for another coalition with the Freedom Party.

But a new alliance with the humiliated Freedom Party could mean more instability for the people of Austria.