“I want to guarantee to those who are watching us from abroad that Portugal does not intend to be a burden for the future to other countries that lent us the means that we needed today to face up to our responsibilities,” he said in his victory address.

“We will do everything possible to honour the agreement established between the Portuguese state, the European Union and the International Monetary Fund, to regain the confidence of markets,” he added.

The PSD won 105 seats in the 230-seat parliament while the Socialists captured 73, the interior ministry said after only the results of votes cast abroad which select four seats in the assembly were left to count.

The result leaves the party short of a majority but Passos Coelho said he would immediately seek to form a coalition government with the smaller, conservative CDS-PP party which won 24 seats.

That would give the two parties, which last governed in a coalition between 2002 and 2005, an absolute majority of 129 seats in the assembly.

Investors have kept Portugal’s borrowing costs close to record levels even after the bailout agreement was reached in May on fears that the new government that emerges after the election may lack a strong enough mandate to get parliament to pass the austerity and reforms called for in the deal.

“The years ahead are going to require much courage on the part of all of Portugal. This is going to be difficult but it is going to be worth it,” added Passos Coelho.

The bailout is conditional on measures that include tax hikes, a freeze on state pensions and salaries and a reduction in unemployment benefits as well as their duration.

Passos Coelho campaigned on a promise to “go beyond” the demanding bailout conditions negotiated by his predecessor in term of privatisations and economic reforms aimed at reducing the role of the state.