South Korea's ruling conservative party is unlikely to win an absolute majority in parliament for the first time in 16 years, broadcaster KBS reported on Wednesday, based on projections of early results.
President Park Geun Hye and her Saenuri Party, which had been widely expected to come out on top despite a foundering economy, could now find it difficult to enact contested economic reforms before Park leaves office in 2018.
According to the broadcaster's calculations, Saenuri will remain the largest party but may take only 131 of 300 seats, putting it just slightly ahead of the largest opposition party, the Minjoo or Democratic Party of Korea (MPK), which will likely win 113 spots.
The newly formed liberal People's Party is expected to come third with 37 seats. The co-chair of the party, former software developer Ahn Cheol Soo, has presidential ambitions according to media reports.
Recent opinion polls, including from Gallup Korea, had predicted that Saenuri would emerge as the clear winner of the election with 157-175 seats.
It had won the elections four years ago with 152 seats, a slim majority.
"Everything was going right for them because the opposition was splintered. But the Saenuri had their own internal strife that disappointed the voters," Song Se Ryun, a professor of law at Kyung Hee University, told broadcaster Arirang.
Floating voters look to have made the difference, with their numbers estimated at above 30 per cent.
The parliamentary election is seen as an important test of the political atmosphere in Asia's fourth-largest economy ahead of presidential elections at the end of 2017.
A good election result can boost a party's votes for the presidency. However, South Korea's presidential system permits the head of state to govern even over an opposition majority in parliament.
Park, who remains in office until February 2018, cannot stand for re-election once her five-year term is up.