Mexico's ruling party could lose majority after close vote

MEXICO CITY (Reuters) - Mexican President Enrique Pena Nieto's slim working majority in the lower house of Congress hung in the balance on Monday after mid-term elections held amid widespread anger over corruption, gang violence and weak economic growth.

Mexicans cast votes on Sunday for the 500-strong lower house as well as nine state governorships and more than 1,000 state and municipal posts in what was seen as a referendum on Pena Nieto's rule. The Senate was not up for renewal.

By early Monday morning, with nearly three-quarters of polling station returns, preliminary results showed that Pena Nieto's Institutional Revolutionary Party (PRI), along with its allies, the Green Party and the smaller New Alliance Party, had won 38.94 percent of the vote.

The PRI and its coalition partners had a one-seat majority of 251 seats heading into the vote, having won around 42 percent of the vote in the 2012 election.

Early forecasts from Mexico's electoral authority INE had shown the PRI and its partners winning between 246 and 263 of the 500 seats in the lower house.

The PAN had 20.76 percent of the vote, the preliminary results showed.

At least seven candidates and nine campaign officials were murdered in campaigning blighted by drug cartel intimidation and dissident teachers protesting against education reforms.

Activists stole or set fire to dozens of ballot boxes in the restive states of Guerrero, Oaxaca and Chiapas early on Sunday, but the vote was otherwise largely peaceful.

Underscoring disenchantment with the PRI, a blunt, outspoken rancher who defected from the party was set to become the first independent candidate to win a state governorship in modern Mexican history, early results showed.

Known as "El Bronco" (the gruff one), Jaime Rodriguez was set to win the economically powerful northern state of Nuevo Leon by a big margin after tapping into widespread discontent with Mexico's established parties.

Pena Nieto pushed through economic reforms early in his presidency but he has been hit by allegations of corruption and for failing to bring drug violence under control.

Stung first by international outcry over the apparent massacre of 43 students in September by a drug gang working with local police, Pena Nieto was then caught up in a conflict-of-interest scandal following revelations that he, his wife and his finance minister had bought houses from government contractors.

Having fulfilled the bulk of his main legislative pledges, including measures to end the state oil and gas monopoly and open up the telecoms sector to competition, Pena Nieto is not expected to rely on Congress as much in his last three years.

However, the government still has legislation pending, including bills aimed at encouraging investment in rural areas.

(Additional reporting by Gabriel Stargardter, Liz Diaz and Max de Haldevang; Editing by Simon Gardner, Kieran Murray and W Simon)

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