Democratic Alliance edged ahead of incumbent Socialists in nail-biting count that saw far-right surge.

Montenegro declared victors early on Monday morning, shortly after the Socialist Party (PS)’s leader Pedro Nuno Santos conceded defeat.

The AD and its conservative allies in Madeira won a total of at least 77 seats in the 230-seat parliament, ahead of the PS’s 74. Far-right Chega was third with 46, with 11 seats yet to be attributed after the final count.

“It seems inescapable that the AD won the elections and that the Socialists lost,” Montenegro told excited supporters who had gathered in the capital, Lisbon.

Sunday’s snap election, triggered by Socialist Prime Minister Antonio Costa’s sudden resignation amid a corruption investigation, was marked by a surge in support for Chega, which positioned itself as an alternative to the two parties that have long dominated Portuguese politics.

It took place against a backdrop of low wages and a high cost of living – worsened last year by surges in inflation and interest rates – coupled with a housing crisis and failings in public healthcare.

Montenegro said that despite the close result, he would stand by his election promise not to rely on Chega to govern. It was crucial for political parties in the new parliament to act responsibly and “comply with the wish of the Portuguese people”, he said.

Chega leader Andre Ventura, a former law professor and television football pundit, has said he is prepared to drop some of his party’s most controversial proposals – including chemical castration for some sex offenders and the introduction of life prison sentences – if that enables his party to be included in a governing alliance with other right-of-centre parties