COPENHAGEN, March 27 (Reuters) - Denmark's Prime Minister Mette Frederiksen and her Social Democrats on Friday began negotiations to form a coalition government, hoping to secure a third term in office despite a massive defeat for her centrist cabinet in Tuesday's election.
She handed in her resignation to the king of Denmark on Wednesday when it became clear that her bipartisan coalition with the centrist Moderates and the right-wing Liberals could no longer govern.
Analysts said the vote showed a revolt over the cost of living and that many Danes had grown tired of Frederiksen after seven years in power, even though they credited her with standing up to U.S. President Donald Trump over his threats to annex Greenland.
The need to forge consensus between many small groups in the 12-party parliament will complicate the talks, said Andreas Thyrring, a partner at Ulveman & Borsting, a public affairs advisory firm.
"The parties are quite divided on the substance, which also means that, after an election campaign, they may have to back down a bit on some promises," he said.
Frederiksen already has the Social Liberals and the Left Greens on her side, two left-wing groups that say she should become prime minister, but the Social Democrats must also convince other groups to back them if they are to stay in power.
Her party suffered its worst election result since 1903, winning just 38 seats in the 179-seat Folketing - down from 50 - but still remains the largest party in parliament.
In total, Frederiksen's left-wing bloc secured 84 seats in parliament, slightly ahead of the right-leaning bloc's 77 seats, leaving both sides short of the 90 seats required to form a majority government.
TALKS MAY HINGE ON TAX POLICY
While other left-wing parties may support a coalition between the Social Democrats, the Social Liberals and the Left Greens, Frederiksen would also need support from the non-aligned Moderates or right-wing parties to form a working majority.
Key to the talks could be tax policy. Frederiksen has proposed a wealth tax on the richest Danes that is opposed by centre-right parties, while her promise to restrict the use of pesticides has also antagonised the country's farming industry.
If Frederiksen fails to build a new coalition, the king would have to hand another party leader the task of exploring options for forming a government.
(Reporting by Soren Jeppesen, Stine Jacobsen and Louise Rasmussen, editing by Terje Solsvik and Sharon Singleton)
