Georgia's president admits defeat in elections

Georgia's President Mikheil Saakashvili has admitted that his party has been beaten in the country's fiercely contested parliamentary elections by billionaire Bidzina Ivanishvili's Georgian Dream coalition – potentially marking a shift in the country's foreign policy perspective away from Europe and back to Russia.

"After summarising the preliminary results of parliamentary elections, it is obvious that the coalition Georgian Dream has gained an advantage," Saakashvili said in a statement on television. The country's central election commission said that after a quarter of the votes had been counted Ivanishvili's Georgian Dream had 53 per cent of the votes and Saakashvili's ruling United National Movement was on 42 per cent.

Ivanishvili – whose wealth is put at $6.4bn by Forbes – had already claimed victory before the president's concession. It will be the first democratic and peaceful transfer of power in post-Soviet Georgia.

The country's parliament is set to nominate Ivanishvili as prime minister. Meanwhile Saakashvili, who took power in the peaceful rose revolution in 2003, will continue as president until elections next year. At that point the parliament and prime minister will gain new powers as part of a major political reform.

"Democracy works and the Georgian people take the decision and this is what we deeply respect," Saakashvili, a pro-western leader, said. He has warned that Ivanishvili will lead Georgia back into Russia's sphere of influence. But Georgia's richest man has said his foreign policy goals would include pursuing North Atlantic Treaty Organisation membership and European integration as well as improving relations with the Kremlin.

On the conduct of the elections, the Organisation for Security and Cooperation in Europe reported that they were "competitive, with active citizen participation through the campaign" but there was a "polarised and tense" environment. "While freedoms of association, assembly and expression were respected overall, instances of harassment and intimation of party activists and supporters negatively affected" the elections, the OSCE said.

But it noted that despite some "procedural shortcomings", election day was "calm and peaceful". Tonino Picula, who led the OSCE mission, said he was confident that "the final count will reflect the choice of the voters".

The elections were a "sign of Georgia's growing political and democratic maturity", said European Parliament president Martin Schulz. He said he hoped relations between the EU and Georgia would be "further strengthened". "If the partial results of the ballot are confirmed, it will be for the first time in Georgia's history that governmental power will be transferred via a democratic process. I commend all political forces," he said.

Guy Verhofstadt MEP, leader of the Alliance of Liberals and Democrats, said: "The confrontation and animosity seen during the election campaign must be put firmly to one side and focus must now turn to the real needs of the Georgian people. The new government should be formed with no delays." He added that it should "pursue a national consensus on key projects like justice and jobs, Euro-Atlantic integration and territorial integrity".

Romanian MEP Norica Nicolai – part of the parliament's observer mission during the elections – said it could prove to be "a turning point" for Georgia, setting a course towards European and transatlantic integration.