Belgrade  - Serbian parties were preparing to launch difficult coalition talks but it was clear Tuesday that the late strongman Slobodan Milosevic's Socialists would decide the character of the next cabinet and the country's course.

The pro-European coalition led by President Boris Tadic's Democratic Party (DS) won the most seats, 102 out of the 250 in Sunday's poll, but needs more than ally to secure a majority of at least 126.

Tadic wants to keep Serbia on course to European Union membership, which has been challenged by the ultra-nationalist camp, which seeks to steer the country away from the West in protest at its support of Kosovo's independence.

The Liberal-Democratic Party (LDP) also wants close ties with the West, but has a limited coalition potential owing to its fierce criticism of all other players on the Serbian political scene, including DS.

DS and LDP would however pact, but with its 13 seats, the smaller party does not have enough - even with the five friendly ethnic minority representatives, the two parties would be five seats short of the majority.

The anti-western bloc comprises the far-right Serbian Radical Party (SRS) and outgoing Prime Minister Vojislav Kostunica's Democratic Party of Serbia (DSS), with 78 and
30 votes in parliament.

SRS and DSS announced Tuesday a coalition deal based on agreed "character and programme goals" of the government. However, they are 19 votes short of the majority.

Somewhere in between the two blocs is the Socialist Party (SPS), with 20 votes - the necessary ingredient of a ruling coalition headed either by Tadic or SRS leader Tomislav Nikolic and Kostunica.

The SPS has a dark past and is seen as the force most responsible for the devastation across former Yugoslavia during the 1990's.

It has barely survived Milosevic's fall in 2000 and is trying to show a freshly-washed, tolerant face today, two years after the strongman's death - though it has never renounced him.

After completing the deal with DSS in express talks, Nikolic said it "was now up to the SPS," Tanjug reported.

The Socialists have refused to commit so far, though their leader Ivica Dacic stood by their pre-election promise to talk with Kostunica first.

"We will first start negotiations with ... Kostunica, which doesn't mean we will disregard the fact that the SRS won a credible number of votes," SPS official Branko Ruzic was quoted as saying. "Socialist Party will also bear in mind that the ticket headed by DS won a large number of votes."

Top officials of Tadic's DS meanwhile also indicated that SPS was now an acceptable partner. "These young people want to transform this party, to become a useful, acceptable partner for Europe and for everybody," the DS political director, Dragoljub Micunovic, said.

Kostunica's rump government, dominated by Tadic's people, signed a pre-membership agreement with EU, which the next parliament would ratify or scrap.

Nikolic and Kostunica vowed to annul it in the first act by the new legislature, and turn Serbia to a closer economic and political alliance with Russia. They claim that by accepting the deal with EU, Serbia would recognize the loss of Kosovo.

Tadic and his allies said the Stabilization and Association Agreement with EU must be ratified to serve as a basis for billions of dollars of foreign investments, such as the sale of the carmaker Zastava to Italy's Fiat, tentatively planned for June. (dpa)