Sweden government reaches deal to avert snap election

STOCKHOLM - Sweden's minority centre-left government on Saturday announced it has reached a deal with the opposition that will avert what would have been the country's first snap elections in more than half a century.

Prime Minister Stefan Loefven announced the deal with the centre-right opposition coalition at a press conference.

Earlier this month he had called early elections after a small far-right party with the balance of power in parliament, the Sweden Democrats, torpedoed his fledgeling government's budget.

"Thanks to the agreement we have found enabling a minority government to govern, the government will not organise early elections," Loefven said.

The premier spoke alongside members of the Greens party, his allies in government, and members of the four-party centre-right opposition, the Alliance.

The snap poll had been called to take place on March 22.

If it had gone ahead, it would have been the first early elections in politically stable Sweden since 1958.

The Sweden Democrats - which had won 13 per cent of the vote in parliamentary elections held in December - launched their budget spoiler on December 3 as a protest over the government's pro-immigration policies.

Saturday's announcement of a deal implies that the opposition will not oppose the budget in a new vote.