The head of Sweden’s Moderate Party, Ulf Kristersson, said on Wednesday he would begin the work of forming a new government after Prime Minster Magdalena Andersson conceded her Social Democrats had lost the weekend’s general election.

The Moderates, Sweden Democrats, Christian Democrats and Liberals appear set to get 176 seats in the 349-seat parliament to the centre-left’s 173 seats, according to the latest figures from the election authority.

The election marks a watershed in Swedish politics with the anti-immigration Sweden Democrats, a party with roots in the white supremacist fringe, on the threshold of gaining influence over government policy.

The success of the party, which took over from Kristersson’s Moderates as the country’s second biggest, has raised fears that Sweden’s tolerant and inclusive politics are a thing of the past.

However, their message that Sweden’s troubles, notably gang crime, are the product of decades of liberal immigration policy has resonated with many Swedes.

Kristersson promised to form a government “for all of Sweden and all citizens.”

Though Kristersson’s party is smaller, Sweden Democrat leader Jimmie Akesson lacks the wide right-wing support required to depose the Social Democrats.

Kristersson is likely to try to establish a government with the Christian Democrats, with backing from the Sweden Democrats and Liberals in parliament.