Swedish Liberal party to back Social Democrat Lofven as PM

Sweden's centre-right Liberal party voted on Sunday to back a deal that could give Social Democrat leader Stefan Lofven a second term in office after months of deadlock since the tied election.

The Centre Party and the Greens have also agreed to back Lofven's future budget bills in a four-party deal that would force the centre-left leader to reverse course and deliver tax cuts and labour market reform if he becomes prime minister.

The Liberals' executive committee voted 62-30 in favour of the deal, Swedish newswire TT reported.

The parties will still be short of a majority in the 349-seat parliament and will need support from the Left Party, which backed Lofven's Social Democrat and Green coalition from 2014-18, to pass bills.

September's election delivered a hung parliament and the two major blocs have been at loggerheads over how to form a government without the support of the anti-immigration Sweden Democrats, a party with roots in the white-supremacist fringe and who hold the balance of power.

The speaker will nominate a candidate for the premiership on Monday and parliament will hold a vote on Jan. 16.

Lawmakers have already voted twice against Lofven and once against his rival Ulf Kristersson, the leader of the four-party Alliance that includes the Centre and Liberal parties.

(Reporting by Stockholm Newsroom Editing by David Goodman )