By Johan Sennero and Daniel Dickson
STOCKHOLM (Reuters) - Sweden took a big step towards a new government on Tuesday as the Centre Party said it would consider accepting Social Democrat Stefan Lofven as prime minister if he meets their policy demands, including lower taxes.
A Sept. 9 election gave neither the centre-left or the centre-right a majority, leaving the balance of power with the Sweden Democrats, a hard-right anti-immigration party that mainstream groups refuse to deal with.
The Centre Party had campaigned for dethroning Lofven, but, after weeks of stalemate, its leader signalled a major shift.
"Lofven needs to accept our demands for us to consider letting him pass the vote next week," Annie Loof told reporters. "If they do, we can start negotiating on a budget, but we're not there yet."
Her demands include lower taxes and less restrictive labour laws and housing rental rules. She ruled out her party joining a Social Democrat-led government.
Lofven will face a parliamentary vote next week. If the Centre Party abstains, he could pass by securing votes from long-time collaborators the Green Party and the Left Party.
Social Democratic leader and caretaker prime minister Lofven welcomed the signals from the Centre Party.
"It's good and it takes the process forward but I have to see her demands before I say more," he told reporters.
Earlier this month Ulf Kristersson, the leader of the centre-right Moderates, lost a vote to become prime minister after the Centre Party and the Liberals, both part of his Alliance bloc, refused to back him due to the fact that his government would also need support from the Sweden Democrats.
GRAPHIC - Election scenarios: https://tmsnrt.rs/2p45tJh
(Writing by Johan Ahlander; Editing by Robin Pomeroy)
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Updated Date: Nov 28, 2018 00:06:46 IST