* Vote comes after previous govt collapsed over economy
* Final result not expected until Sunday
By Patrick Lannin
REYKJAVIK, April 25 (Reuters) - Icelanders voted on Saturday in an election likely to give a historic win to the minority caretaker government that stepped in after protests over an economic crisis toppled the previous administration.
If the Social Democrat/Left-Green alliance wins as expected and becomes a majority government it will be the first time centre-left parties will hold such a strong position in Iceland.
It would also be the electoral rebuke to the leading centre-right party, the Independence Party, which led the failed coalition government.
Icelanders took to the streets in January after their banks buckled under a heap of debt that was used to fuel aggressive overseas expansion into financial services.
The economy went into meltdown and its currency plummeted, forcing the government to agree a $10 billion IMF-led rescue for this nation of 300,000. Iceland still expects the economy to contract by more than 10 percent this year and inflation was 15.2 percent in March.
Voting in the election, called ahead of the 2011 due date, began at 0900 GMT and was due to end at 2200 GMT.
First results are expected almost immediately after voting ends, although a final result is not due until early Sunday.
The new government is expected to have to take tough decisions to cut budget spending and raise revenues and find ways to reduce surging unemployment.
The parties are also expected to agree on entry talks with the European Union and eventually hold a referendum, though Icelanders remain split on joining the bloc and the Left-Greens are opposed to entry.
"I will defend the weakest in this society with all my might, the invalids, the poor, those who are most vulnerable," said Johanna Sigurdardottir, 66, the Social Democrat prime minister who is expected to retain the post after the vote.
"But we will need to cut down on expenses," she added during a television debate show on Friday night.
The last pre-election poll for state broadcaster RUV and daily newspaper Morgunbladid showed Sigurdardottir's Social Democrat Alliance winning 20 seats in the 63-seat Althingi parliament and becoming the biggest party.
The Left-Greens, led by Finance Minister Steingrimur Sigfusson, 53, were set for 17 seats, giving the two parties 37 in total for a majority in the house.
The centre-right Independence Party, leader of governments since World War Two but which has been blamed for the crisis, was set for 15 seats, 10 less than in the 2007 election. (Reporting by Patrick Lannin; Editing by Matthew Jones)