NORWAY'S centre-right opposition, pledging privatisation, tax cuts and smaller government, was expected to record a sweeping election win last night but faces difficult coalition talks since a populist anti-immigration party will hold the balance of power.

Norway has enjoyed rare economic success, thanks to its flourishing offshore oil sector, but growth is slowing and voters are ready to punish Labour Prime Minister Jens Stoltenberg, accusing him of wasting a once-in-a-lifetime economic boom.

Labour could still end up as the biggest party with 30%, opinion polls show, but that will not be enough. The four centre-right parties, led by likely future prime minister Erna Solberg's Conservatives, are on course for around 100 seats in parliament, 15 more than needed for a majority.

Her trickiest task is likely to be talks with the populist, anti-immigration and anti-tax Progress Party, which is set to finish second among the opposition groups.

Although Progress has toned down its rhetoric, it is seen by some as too radical to enter government and once had among its members Anders Behring Breivik, who killed 77 people in 2011 in a gun and bomb attack targeting Labour.