COLOMBO, April 3: Sri Lanka was headed on Saturday for a shaky coalition government as President Chandrika Kumaratunga's party made gains in an election called to settle a power struggle that has set back the island's peace process.

The party of Ms Kumaratunga, who has accused the incumbent prime minister Ranil Wickremesinghe of conceding too much to Tamil rebels, said it could form the next administration although it did not appear to win a majority in parliament.

"We are emerging the largest single party and we will form the government," Ms Kumaratunga's spokesman Harim Peiris told AFP. "That is clearly the intent," he added

Mr Peiris did not say who the coalition partners would be.

Ms Kumaratunga's Freedom Alliance includes the Marxist JVP, or People's Liberation Front, which in the past has staunchly opposed concessions to the Tigers.

With about four-fifths of the 10.31 million ballots counted, the Freedom Alliance had received 47.2 per cent. Mr Wickremesinghe's United National Party was trailing with 37.9pc.

The proxies of the Tamil Tiger guerillas, the Tamil National Alliance, had 5.9pc of the vote and looked set to be the most crucial factor in deciding the future government.

Election chief Dayananda Dissanayake withheld releasing the final outcome of Friday's election following reports of irregularities in two of the 22 electoral districts.

Fresh polls in the two areas could hold up the results for up to a week.-Agencies