Reykjavik  - Iceland's leftists were winning Parliamentary elections Saturday in Iceland, according to initial counting of 30 per cent of the vote.

Amidst the ravages of the global economic meltdown, the current interim government of the Social Democrats under Prime Minister Johanna Sigurdardottir and Green Party had taken 52.8 per cent of the vote, bettering their 41.1 per cent received in the last elections two years ago.

The coalition had been expected to win.

The conservative Independence Party, the traditional power house on the North Atlantic island, slipped from 36.6 to 23 per cent.

The previous grand coalition government under Geir Haarde, 58, resigned in January, after Iceland's economy imploded under the pressure of the collapse of three of its over-stretched banks, and mass street protests.

Haarde did not run for re-election, amid survey findings that his conservative party would lose more than one-quarter of its support amid the country's financial meltdown.

Political observers were expecting a lower turnout among the 277,000 eligible voters on Saturday, and that possibly an unusually higher number of ballots would be returned blank in a form of protest against the established parties.

Sigurdardottir, 66, became the world's first openly lesbian head of government when she took over as caretaker prime minister.

The financial collapse has forced the tiny north Atlantic country of 300,000 inhabitants to consider applying to join the EU.

The collapse of the country's banking sector led to a plunge in the currency and an emergency bail-out from the International Monetary Fund. (dpa)