Romanian President Traian Basescu was left little choice but to re-appoint rival Victor Ponta as prime minister after the leftist's party won an election resoundingly.

Mr Ponta's Social Liberal Union (USL) won up to 60% of votes in yesterday's parliamentary election, results showed.

The electoral system could give it an even bigger share of seats in the Balkan country's parliament, putting Mr Ponta in a strong position in a power struggle with the right-wing Mr Basescu.

Mr Basescu had said he would not ask Mr Ponta to be prime minister again after the USL failed to impeach him in July.

While he has since softened his tone, he could try to split the USL by naming someone else from the alliance of leftists and liberals.

Any uncertainty over a new government would delay talks over a new deal with the International Monetary Fund to replace a €5bn  agreement expiring in early 2013.

The leu currency and Bucharest stocks were a touch lower and bond yields rose slightly, but dealers said they may rally if a new government is in place quickly.

Mr Basescu has not yet commented on the election result. Ponta has said he hopes the vote will end the political "civil war".

Mr Ponta's party has promised to roll back the previous centre-right administration's austerity policies by cutting taxes and raising salaries, though it has limited room to do so given expectations of growth this year of just 0.4%. 

For its attempt to impeach the president, the USL came in for harsh criticism from the EU and US, which accused it of undermining the rule of law. Political analysts say that could discourage it from more radical steps.

On many indicators, Romania trails other ex-communist neighbours like Hungary, Poland and the Czech Republic.

Corruption is rife, its roads and rail are outdated and it cannot provide reliable basic services such as running water and electricity to all its 19m people nearly a quarter of a century after the fall of dictator Nicolae Ceausescu in 1989.

It joined the EU in 2007 but remains the second poorest and effectively a second-tier member.

It is excluded from the passport-free Schengen zone because of corruption concerns, and with its judicial system subject to special monitoring.