By Michael Shields and Francois Murphy
VIENNA (Reuters) - Postal votes in Austria's parliamentary election will be counted on Monday to settle a close race for second place between the Social Democrats (SPO) and the far-right Freedom Party that will shape coalition talks with the young conservative victor.
Conservative People's Party (OVP) chief Sebastian Kurz, who is just 31, is on track to become one of the world's youngest leaders, after securing victory on Sunday with a hard line on immigration that blurred lines with the Freedom Party (FPO).
But his party is well short of a majority and will probably need a coalition partner to govern. An alliance with the FPO is the most likely option, although Kurz has been careful to keep his options wide open.
"Neither a coalition with the FPO nor one with the SPO has been agreed," Kurz told broadcaster ORF when pressed on his plans. "We have to wait for the result."
The bulk of postal ballots - which amount to roughly a sixth of ballots cast - should be counted by Monday evening but a final count might not be available until Thursday.
A projection by pollster SORA showed Kurz's People's Party (OVP) winning the election with 31.6 percent of the vote, based on a count of all non-postal ballots. The OVP's current coalition partners, Chancellor Christian Kern's Social Democrats, were at 26.9 percent, just ahead of the FPO at 26.0 percent.
The projection had a margin of error of 0.7 percentage points, meaning the race for second place was too close to call.
Another projection by pollster ARGE Wahlen had the Social Democrats just 0.5 percentage points ahead of the FPO.
A record number of postal ballots, more than 889,000, were issued ahead of Sunday's election.
In Austria those ballots can be cast by post or in polling stations. They can also be cast in polling stations other than where a voter is registered. In that case, the ballot must then be sent to the voter's home district, which is why a final count might not be available until Thursday.
That system is new, making predictions difficult, but the bulk of the postal ballots are expected to be counted on Monday and should make clear which party came second.
Any tie-up between two of the top three parties is possible, since the SPO has lifted a self-imposed ban on coalitions with the FPO. But if the Social Democrats were to come third, it is highly unlikely they would form an alliance with the FPO and make FPO leader Heinz-Christian Strache chancellor.
(Reporting by Francois Murphy; Editing by Jonathan Oatis)