Stefan Lofven was defiant after becoming the first Swedish prime minister in history to be ousted by a confidence vote in parliament.
The 61-year-old was voted out of office on Tuesday after the centre-right opposition and the nationalists teamed up to end four years of Social Democratic rule.
Lofven, the leader of the Social Democratic Party who has been prime minister for four years, will continue in a caretaker role until a new government can be formed that has the command of the Riksdagen.
Lawmakers voted 204-142 against Lofven, while three abstained. The vote was mandatory after the September 9 general election delivered a hung parliament.
Though Lofven remains optimistic that he may be able to form a government, the vote means Sweden faces weeks of political uncertainty.
Both main political blocs in the parliament have refused to cooperate with the anti-immigrant Sweden Democrats, which made great strides in the election.
Neither the left-leaning bloc led by the Social Democrats nor the Moderates-led centre-right opposition managed to secure a majority in the 349-seat parliament.
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In the election, the Social Democrats got 28.3 per cent of the vote while the Moderate Party received 19.8 per cent and the Sweden Democrats 17.5 per cent.
The centre-left and centre-right blocs control respectively 144 and 143 seats while the Sweden Democrats have 62 lawmakers in the assembly.
Andreas Norlen, a member of the centre-right Moderates who was elected Monday as speaker, is charged with trying to find someone in parliament who may be able to command a majority and to form a government.
The speaker has four attempts to designate a party leader to build a government. After that, new elections have to be called.
A new government could take weeks or months – as was the case in Germany and Italy – to thrash out.
Lofven remained optimistic he could form a governing coalition but stopped short of saying with whom.
“I am available for talks,” Lofven said after the vote.
Lofven ruled out having any contacts with the Sweden Democrats, saying “time after time, their connections to racist and Nazi organisations have been exposed.”
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The Dagens Nyheter newspaper said in an editorial Tuesday that Sweden’s fragmented political landscape, the slow decline of social democracy and the rise of political extremes had pushed the traditionally stable and consensus-oriented country into “unknown territory”.
Parliament wrote a “new page in Sweden’s political history” by voting out a prime minister without an alternative ready to govern, wrote the country’s other main newspaper, Svenska Dagbladet.
Bloomberg, Associated Press, Agence France-Presse