UPDATE 7-Spain's Socialists seen ahead but short of majority in election

The Socialists of outgoing Prime Minister Pedro Sanchez appeared to take the lead in Spanish elections on Sunday, according to a survey published shortly after polls closed, but no single party looked close to winning a parliamentary majority. Neither bloc of left or right parties had a clear advantage, with the right-wing vote split by the emergence of nationalist group Vox, which seems set to win a sizeable presence in parliament, according to the GAD3 survey of voter intentions.

Spaniards cast their votes in numbers close to record highs in the country's most highly contested election for decades. It is likely to lead to months of negotiations to form a government in a bitterly divided parliament. This is the third national election in four years, after the first two eroded the decades-long dominance of the two biggest parties, the Socialists and the conservative Popular Party.

The difficulty of assembling a governing coalition in such a fractured political landscape means that it is possible that Spain could head into yet another repeat election. "I don't think it's a problem to have different options, that's always constructive. As long as they are able to figure out how to work together after the elections -- that's the big question now," 60-year-old businessman Javier Deval said after voting in central Madrid.

A splintered vote followed by protracted talks to form an administration is becoming a recurrent theme in European politics as voters reject traditional parties in favour of new groups often at the extremes of the political spectrum. In Spain, issues like mass immigration or Euroscepticism that have dominated political discourse elsewhere have been eclipsed by the question of national unity and the threat posed by the independence movement in the northeast region of Catalonia.

Vox's campaign was marked by passionate reference to Spain's history, customs and survival as a nation. The survey showed the party gaining up to 38 seats in Spain's 350-seat parliament. "Catalonia has been the focal point of the campaign and it's what has made me vote for Vox. It's the party that most clearly fights against (Catalan) independence," Alfonso Gomez, a unemployed 57-year-old, said after casting his vote.

In a sign of how Catalan parties will be key in negotiations to form a new government, the survey suggested that, in order remain in power, Sanchez would have to form an alliance with at least one separatist party from Catalonia. First preliminary data will be published at around 1900 GMT with about 20-25 percent of the votes counted, officials said. Officials said they expected that 90 percent of the votes would be counted by 2030-2100 GMT.

In the past two elections, both the early evening opinion polls and the initial preliminary data failed to give an accurate picture of the eventual outcome. (Additional reporting by Andres Gonzalez and Jesus Aguado; Writing by John Stonestreet and Sonya Dowsett)