Swedish PM to call off snap election after deal with centre-right - media

Citing unnamed sources, SWEDISH (SWMA.ES)radio said the deal between the four-party Alliance and the government would see Lofven remaining PM but carry out the opposition's 2015 budget - passed by parliament in December - although with some adjustments.

Lofven's Social Democrats, junior coalition partner the Greens, and centre-right opposition parties the Moderates, the Liberals, the Christian Democrats and the Centre Party called a joint press conference at 0930 GMT (9.30 a.m. BST).

A spokesman for PM Lofven declined to comment.

Sweden's normally stable politics were thrown into turmoil in December when the anti-immigration Sweden Democrats voted against the government's budget, backing an alternative finance bill tabled by the opposition.

Lofven then said he would call a new election at the earliest possible date.

The Sweden Democrats - the third biggest party after September's general election and holding the balance of power - said they wanted to make any snap election a referendum on Sweden's generous immigration policies.

Recent opinion polls show that a new election, which Lofven said he would call for March 22, would not have broken the political deadlock in parliament with neither the centre-right and centre-left able to form a majority government and the Sweden Democrats continuing to hold the balance of power.

Some polls have shown Lofven's Social Democrats, the biggest government party, gaining support, along with the Sweden Democrats.

The Moderates, the biggest opposition party, have seen their support fall since Lofven said he planned to call the snap vote.

(Reporting by Daniel Dickson and Johan Sennero; Editing by Toby Chopra)