Paerson had won four other Olympic medals before taking gold

Paerson, who led after the first run, ignored thick fog in the second for a combined one minute, 29.04 seconds.

Austrian Nicole Hosp took silver after finishing 0.29 seconds behind while compatriot Marlies Schild took bronze.

Kostelic was fifth after the first run and could not make up enough time - finishing fourth in 1:29.94.

Paerson went first in the opening run despite injuring her knee in the warm-up and led the field at the halfway stage of the competition after none of her 63 rivals could overtake her.

She also underwent treatment between the two runs and as the leaders go out last in the second run, when the Swede stood at the top of the slope, Hosp and Schild were leading the way.

This is really unbelievable. To be Olympic champion was my dream Anja Paerson

The second run times were significantly slower after the weather conditions worsened and it was hard to see the competitors at times.

But Paerson ignored all that to produce a second run time of 46.66 seconds - 0.16 seconds slower than Hosp's second effort but enough to give her overall victory.

Her medal was Sweden's 10th of the Games, equalling their all-time record.

"I was almost crying after my injury in the warm-up and now this is really unbelievable," she said.

"I have been through such a hard time and now I have done it. To be Olympic champion was my dream."

Kostelic did not make the most of her chance to defend her title as she lay in fifth place after the first run and only moved up to second behind Schild after her second.

Kostelic missed out on a chance to make history

However Hosp and Paerson's efforts pushed her out of the top three.

Victory would have made Kostelic the first Alpine skier to win five Olympic golds but it was the first time in seven Olympic events that the Croatian had failed to win a medal.

She had already won the combined event in Turin and finished second in the super-G but now says she is unlikely to take part in Friday's giant slalom.

"I am sick, I feel really bad. I'm done. There is very little, little chance that I'm going to ski. I have absolutely no power," she said.

"For this Games, I'm done. I really can't race the giant slalom. It's too much for my body. I tried today and I gave it all and that's it."