COPENHAGEN, March 25 (Reuters) - Denmark's Prime Minister Mette Frederiksen is expected to hand in her coalition government's resignation on Wednesday after suffering a massive election defeat, but could still emerge as leader of a new cabinet in the coming weeks.
Frederiksen's Social Democratic Party had its worst election since 1903 on Tuesday, winning just 38 seats in the 179-seat parliament - down from 50 four years ago - amid voter concerns over migration, a cost-of-living crisis and welfare.
Such domestic policy issues overshadowed the support for Frederiksen's defiant stance toward U.S. President Donald Trump's repeated ambitions to acquire Denmark's semi-autonomous territory Greenland, analysts said.
NEITHER BLOC HAS A MAJORITY
The Social Democrats remain Denmark's biggest party, however, with 21.9% support, meaning Frederiksen is widely seen as having a good shot at returning for a third term as prime minister, albeit following tough and lengthy coalition talks.
"That is the paradox of the election, that the huge loser, Mette Frederiksen, the prime minister, she is the favourite to become the next prime minister as well," political analyst Noa Redington said.
Frederiksen's left-wing bloc won 84 seats in parliament, versus 77 for the right-leaning parties, with both sides falling short of the 90 seats needed for a majority.
That leaves either side dependent on the 14 seats won by the unaligned Moderates Party of Foreign Minister Lars Lokke Rasmussen, a centrist group that could emerge as kingmakers in coalition talks.
Party leaders will on Wednesday hold a traditional day-after debate followed by individual meetings with the king, who has no formal powers, to suggest a candidate for a first stab at forming a government.
Since 2022, Frederiksen has led a grand coalition of the Social Democrats, the right-of-centre Liberal Party and the Moderates. The leader of the Liberal Party, Defence Minister Troels Lund Poulsen, has said he was no longer interested in coalition rule with Frederiksen.
"I'm ready to take on the responsibility," she told supporters at a late-night rally. "It will be difficult."
(Reporting by Tom Little in Copenhagen and Anna Ringstrom in Stockholm, editing by Alex Richardson)
