STOCKHOLM, Sept 16 (Reuters) - Sweden's centre-right government has a clear lead over the opposition before Sunday's election, but Prime Minister Fredrik Reinfeldt could fall short of a majority if the anti-immigrant Sweden Democrats get into parliament. The governing "Alliance" bloc, pledging further income tax cuts if the economy allows, has pulled ahead of the centre-left coalition, headed by Social Democrat leader Mona Sahlin, after trailing for much of its four years in power.
Opinion polls also show the far-right Sweden Democrats could win their first seats in parliament, potentially leaving neither of the two blocs able to form a majority government.
Here are some possible outcomes:
CENTRE-RIGHT MAJORITY GOVERNMENT
Probability: Likely
The centre-right, dominated by Reinfeldt's Moderates, have held a lead in opinion polls since June this year and recent opinion polls suggest the bloc has pulled further ahead in recent weeks.
A rapid economic recovery in Sweden and solid public finances have given a boost to the governing coalition while Reinfeldt also polls higher than his main rival, Sahlin, in popularity. The Nordic country is set to run the lowest public deficit in the European Union this year, in percentage terms.
If he wins, Reinfeldt has pledged to cut income taxes further if the overall economy and spending on Sweden's cherished welfare state allow.
A centre-right government also wants to sell more assets -- eyeing divestment of stakes in bank Nordea, telecom operator TeliaSonera and utility Vattenfall.
Financial markets are expected to take a centre-right majority win in their stride, with limited gains for the crown and slightly lower bond yields as the threat of a hung parliament and political uncertainty recedes.
NO CLEAR MAJORITY FOR EITHER BLOC
Probability: Possible
Most opinion polls in recent weeks show the anti-immigration Sweden Democrats clearing the four-percent threshold to win their first seats in parliament, potentially leaving neither main bloc holding a parliamentary majority.
This outcome is seen triggering a short but intense bout of market volatility -- analysts expect a sharp fall in the crown and a rise in Swedish government debt yields.
Two of the 10 most recent opinion polls tracked by Reuters show the Sweden Democrats, with roots in Sweden's extreme right-wing movements, holding the balance of power.
Both main blocs have ruled out co-operation with the party.
-- MINORITY GOVERNMENT: The likeliest result in the event of an inconclusive result would be Reinfeldt staying on to head a minority government, seeking bipartisan support to pass some legislation and avoiding contentious issues.
Sweden has been ruled by minority governments, mostly Social Democratic ones, through much of the post-World War Two era. Rules were changed in the 1990s to make it easier for such governments to pass the key budget bills.
However, a minority government would struggle to impose many of its policies and the spectre of snap elections would be likely to linger throughout the four-year term.
-- NEW COALITIONS: A 'hung' parliament will unleash an intense bout of horse-trading to land a majority as the centre-right seeks to bring on board the Green Party and the Social Democrats look to entice the Liberals and Centre Party into a coalition.
The Social Democrats' prospects for beefing up their coalition look remote, while Reinfeldt could have more luck enlisting the Green Party, a relative newcomer to the centre-left camp, though he faces a daunting task in reconciling conflicting views in areas such as energy.
The Greens have never been in government, though they supported Social Democrat cabinets in parliament in the late 1990s and early 2000s.
A "grand coalition" of Moderates and Social Democrats -- the two main rivals for political power in Sweden over the past two decades -- would be a very remote possibility, with both parties likely to prefer a fresh election if they were unable to forge a a viable majority of their own.
-- NEW ELECTION: Sweden has not held an early election since 1958, when disagreement over a new state pension system split a coalition of the Social Democrats and Centre party.
CENTRE-LEFT MAJORITY
Probability: Very unlikely
The prospects of the Social Democrat-led opposition winning enough votes to form a majority government have grown ever more remote in recent weeks.
The combined centre-left has not polled higher than the governing bloc in any survey tracked by Reuters since June 23.
An upset win for the centre-left, which has pledged to stay within the published budget outlines of the outgoing government over the next four years, would trigger only a moderate reaction in financial markets. (Reporting by Niklas Pollard; Editing by Kevin Liffey)