Mexico ruling party majority hangs in balance after close vote

MEXICO CITY - Mexican President Enrique Pena Nieto's slim working majority in the lower house of Congress sat in the balance early on Monday after mid-term elections held amid widespread anger over corruption, gang violence and weak economic growth.

Mexicans cast votes on Sunday for the 500-strong lower house as well as nine state governorships and more than 1,000 state and municipal posts in what was seen as a referendum on Pena Nietos rule. The Senate was not up for renewal.

Early forecasts from Mexico's electoral authority INE showed his Institutional Revolutionary Party (PRI) and its partners winning between 246 and 263 of the 500 seats in the lower house.

The PRI, the Green Party and the smaller New Alliance Party (PANAL) had a one-seat majority of 251 seats heading into the vote. The preliminary count suggested support for the PRI itself had waned somewhat since the presidential election in 2012. "Security and corruption are the most important things that must be improved," said Luis Castillo, an 80-year-old pensioner, after voting for the centre right opposition National Action Party (PAN) in Mexico City. "The PRI have spent 70 years being corrupt and that is enough," he added.

At least seven candidates and nine campaign officials were murdered in campaigning blighted by drug cartel intimidation and dissident teachers protesting against education reforms.

Fresh violence flared over the weekend, with 16 people killed on Saturday when gangs clashed near the resort city of Acapulco, although it appeared to be unrelated to the election.

Some 40,000 police and troops were deployed across southern Mexico to safeguard the vote.

Activists stole or set fire to dozens of ballot boxes in the restive states of Guerrero, Oaxaca and Chiapas early on Sunday, but the vote was otherwise largely peaceful.

Underscoring disenchantment with the PRI, a blunt, outspoken rancher who defected from the party looked on course to become the first independent candidate to win a state governorship in modern Mexican history, early results showed.

Known as "El Bronco" (the gruff one), Jaime Rodriguez was forecast to win the powerful northern state of Nuevo Leon by a big margin after tapping into widespread discontent with Mexico's established parties.

Pena Nieto pushed through a raft of economic reforms early in his presidency but he has been hit by allegations of corruption and for failing to bring drug violence under control.

Stung first by international outcry over the apparent massacre of 43 students in September by a drug gang working with local police, Pena Nieto was then caught up in a conflict-of-interest scandal following revelations that he, his wife and his finance minister had bought houses from government contractors.

Having fulfilled the bulk of his main legislative pledges, including measures to end the state oil and gas monopoly and open up the telecoms sector to competition, Pena Nieto is not expected to rely on Congress as much in his last three years.

However, the government still has legislation pending, including bills aimed at encouraging investment in rural areas.