Talks on forming a new coalition government are due to get under way in the Netherlands.
The move comes after the Christian Democrats led by Prime Minister Jan Peter Balkenende slipped to fourth place in the country's general elections.
With nearly 90% of the vote counted, the Liberals, who favour a comprehensive austerity programme, seem set to be the largest party with 31 seats in the 150-seat parliament.
This would give Liberal leader Mark Rutte a mandate to form a coalition and become prime minister, but he needs at least three other parties to secure a parliamentary majority.
Geert Wilders's anti-immigration Freedom Party nearly doubled its seats to be the third-largest parliamentary group behind the Liberals and Labour with 21, reflecting concern in the country about immigration and foreign policy.
Earlier, exit polls showed the Liberals and Labour running neck-and-neck in an election dominated by debate on fiscal austerity after the eurozone's stability was threatened by sovereign debt woes plaguing Greece.
Mr Balkenende conceded defeat for his Christian Democrats when voters turned against the party, nearly halving its seats from 41 to 21. He resigned as party leader.
Wednesday's election was triggered when his Christian Democrat-Labour coalition government collapsed in a row over extending the deployment of Dutch troops in Afghanistan.
