By Carmel Crimmins and Kate Holton
DUBLIN (Reuters) - Ireland's main opposition party Fine Gael is on course to lead the next government but without an overall majority after a stronger showing than expected for its main rival and traditional coalition partner, Labour.
An exit poll for state broadcaster RTE signalled on Saturday that voters had delivered a devastating verdict on Ireland's economic meltdown with the ruling Fianna Fail party expected to be crushed in the biggest collapse in support for any Irish party since independence from Britain in 1921.
Such electoral carnage fires a warning shot for other euro zone governments considering requesting emergency aid from the European Union and the International Monetary Fund.
"This is going to be an exceptionally bad day for Fianna Fail," said Theresa Reidy, political lecturer at University College Cork.
"They're looking at low 20s in terms of seats, that is a loss of more than 50 seats, that is the largest implosion of a party that the party system has ever seen."
The RTE/Millward Brown Lansdowne poll showed Enda Kenny's Fine Gael party winning 36 percent of first preference votes under Ireland's system of proportional representation, its best result since 1982, but defying expectations for a record victory of 40 plus percent.
Around 36 percent of first preferences, if correct, would translate into around 72 seats in the 166-seat parliament meaning that Fine Gael would likely turn to the centre-left Labour party for a coalition administration.
Labour secured 20.5 percent of the vote, which is stronger than recent polls had suggested, giving it around 35 seats, and a strong endorsement of their boisterous campaign to renegotiate the terms of the EU/IMF bailout.
Tapping into disaffection with mainstream parties, the hard-left Sinn Fein party, once the political wing of the now-dormant Irish Republican Army (IRA), was expected to win 10 percent of first preferences, which could treble its presence in parliament to around 15 seats.
Independent lawmakers were expected to win 15.5 percent of first preference votes, possibly also indicating victory for far-left candidates.
Ireland's transformation from economic pin-up to euro zone struggler has electrified the 3 million plus electorate but overall their instincts remain conservative.
Like Fianna Fail, Fine Gael has a pro-business and low-tax ideology and it has pledged to stick to the overall austerity targets laid down by the EU and IMF as a condition of an 85 billion euros bailout package agreed in December.
Kenny, a former teacher and Ireland's longest-serving parliamentarian, is almost certain to be the next prime minister.
The RTE/Millward Brown Lansdowne poll traditionally provides an accurate picture of voting with its exit poll at the last election in 2007 accurate to within half a percentage point.
Manual counting started on Saturday morning and final results will likely run until Sunday.
