The little-known Ehak party won a surprise number of seats

But voters have dented their autonomy plan by denying them an absolute majority in the regional assembly.

The ruling moderate coalition, led by the Nationalist Basque Party's Juan Jose Ibarretxe, won 29 of the 75 seats, gaining just over 38% of the vote.

It lost four seats it won in 2001 elections, while candidates endorsed by a banned pro-independence party won a surprise nine seats.

The newly-formed Communist Party of Basque Lands, or Ehak, came fourth in the polls.

Tough choice

The BBC's Katya Adler in Madrid says the party appears to have mopped up the votes of supporters of the outlawed Batasuna party, the political mouthpiece of militant Basque separatist group Eta.

Mr Ibarretxe's party had hoped that a strong showing in the elections would force the Spanish government to negotiate on a referendum on greater autonomy and the right to break away from Spain.

His party wants to see the introduction of Basque citizenship, an independent judiciary, penal system and direct representation at European Union meetings.

The Spanish parliament rejected the plan, which Mr Ibarretxe says is the only way to stop Basque separatist violence, earlier this year.

Now, our correspondent says, his party faces an uncomfortable decision.

By teaming up with the extremists to form a coalition they risk damaging their political reputation.

But, by joining forces with the Socialist Party, in national government in Spain, they would have to abandon their plan for de facto independence from Spain for the immediate future.

The armed group Eta, blamed for more than 800 deaths since the 1960s, is still active, though considerably weakened by a string of recent high-profile arrests.