Ex-rebel chief seen facing Uruguay election run-off

By Patricia Avila

MONTEVIDEO (Reuters) - A left-wing former guerrilla leader is expected to finish first in Uruguay's presidential election on Sunday but will likely face a run-off as he tries to keep the socialist ruling coalition in power.

Jose Mujica, a blunt-talking senator jailed during a 1973-1985 military dictatorship, holds a double-digit lead over his closest rival in a country whose market-friendly policies have made it one of Latin America's most stable economies along with neighboring Brazil and Chile.

But polls show Mujica falling short of a majority needed to win outright in the first round. Center-right former President Luis Lacalle is running second, trailed by Pedro Bordaberry, another rightist candidate who lags a distant third.

A second-round vote, analysts say, could pose a challenge to Mujica, who led the Tupamaros guerrilla movement that battled security forces and kidnapped government officials during the 1960s and early 1970s but has since moderated his politics.

"This is an important test for the left. Mujica is someone who provokes strong feelings from both his supporters and his critics," said Teresa Herrera, a Uruguayan political analyst.

Mujica, 74, is vying to succeed President Tabare Vazquez, Uruguay's first leftist leader. Highly popular, Vazquez has overseen five years of steady economic growth but is barred from running for a second consecutive term.

As left-wing leaders swept to power across Latin America in recent years, Vazquez won praise from Uruguayans for his moderate leadership and ability to steer the economy out of a 2002 economic crisis triggered by neighboring Argentina's financial troubles.

NO SUITS

A former agriculture minister who eschews suits and ties, Mujica is running as the candidate from Vazquez's Broad Front coalition, a grouping of socialists, former guerrillas and other leftist parties.

Mujica's militant past -- he was imprisoned for his guerrilla activities for 14 years -- has alienated some middle-class voters and business leaders who worry he could turn Uruguay sharply to the left despite his campaign pledges emphasizing moderation.

He vows to adhere to Vazquez's center-left policies emphasizing social programs and pro-market economic policies that have seen the economy grow at an average of 5.7 percent since 2003, more than South American powerhouse Brazil.

Agricultural exports have helped power growth, and the government estimates the economy in the beef-producing country of 3.3 million will expand 1.2 percent this year despite the global economic slowdown.

Popular with working-class Uruguayans, Mujica has sought to dispel business concerns.

"We're not on the cusp of an apocalypse or at the door of the promised land. There is an election that is not the equivalent of a war and the country is going to keep moving forward," he said in the closing days of the campaign, predicting he would win.

Hoping to allay the worries, Mujica tapped Vazquez's former economy, Danilo Astori, as his running mate.

Astori drew praise from Wall Street for his orthodox economic policies and push to have Uruguay sign a free trade agreement with the United States.

Lacalle, Mujica's chief opponent, has sought to tap into voter resistance to Mujica.

The former president, who polls published on Wednesday show with support of between 27 percent and 30 percent, revived his political career after his 1990-1995 term ended in a swirl of corruption allegations, although he was never charged.

Lacalle pledges to keep in place free-market economic policies, and analysts say he could see his candidacy boosted in a second round.

Bordaberry, who is from the conservative Colorado party, is polling between 13 percent and 14 percent and many of his supporters could throw their support behind Lacalle in a run-off that, if needed, would be held on Nov. 29.

However, a poll published by the Grupo Radar consulting firm gave Mujica a six-point lead over Lacalle in a likely second round.

(Additional reporting by Conrado Hornos; Writing by Kevin Gray; Editing by Chris Wilson)