By Thomas Escritt in Bucharest
Traian Basescu, the president of Romania, suffered a heavy blow yesterday in his bid for re-election when the third-placed candidate eliminated in the first round of voting endorsed his rival.
Romania has been at a political standstill since the collapse of the government last month, blocking its access to financial aid.
The agreement reached by the two former rivals makes it more likely a new government can be formed this year, and reduces the risk of early elections.
With almost all votes counted, Mr Basescu, candidate of the centre-right Democrat Liberals, was in the lead with 32.7 per cent of the vote, while Mircea Geoana, his Social Democrat rival, was on 30.1 per cent.
Crin Antonescu, the candidate of the National Liberals, was eliminated from the race after coming third with 20.3 per cent, meaning the votes of his supporters, who tend to be younger urban professionals, will be crucial to deciding the winner in the final round, to be held in two weeks.
Romania's presidency has only a limited policy role, but Mr Basescu's power to nominate prime ministers and authorise prosecutions of ministers, together with his charisma, has made him a formidable counterweight to successive governments.
Labelling Mr Basescu a "demagogue and a populist", Mr Antonescu said he would back Mr Geoana if he agreed to support Klaus Johannis, the ethnic German mayor of the Transylvanian city of Sibiu, as prime minister. Mr Geoana accepted the condition, although their parties have yet to ratify the deal.