MANAGUA, Nicaragua (Reuters) - Former Marxist revolutionary and U.S. Cold War enemy Daniel Ortega headed back toward power on Monday in Nicaragua's presidential election 16 years after voters threw him out to end a war against U.S.-trained rebels.
With returns in from 40 percent of polling stations in Sunday's election, the 60-year-old Ortega had just above the 40 percent of votes that would seal a first-round win.
Two quick counts by respected observer groups also gave Ortega a big enough lead to win without facing a runoff.
An Ortega victory would be a blow to Washington, which backed Contra rebels in the 1980s civil war and fears the leftist would join an anti-U.S. bloc in Latin America led by Venezuelan President Hugo Chavez.
Ortega kept a low profile on Monday but thousands of Sandinista supporters set off fireworks through the night and raced through the streets waving black-and-red party flags.
"We have to leave behind all the serious problems our country has suffered in the past, and move forward," said Ortega's vice presidential running mate Jaime Morales, a former Contra leader who joined his old enemy's camp early this year.
Ortega led the Sandinista revolution that toppled U.S.-backed dictator Anastasio Somoza in 1979 and then allied Nicaragua with the Soviet Union as much of Central America became a Cold War battleground.
When asked in Washington on Monday about the possibility that Ortega has had a change of heart, U.S. Secretary of State Condoleezza Rice appeared skeptical. "We'll see," she said.
Although Ortega says he is now more moderate and campaigned on a vague center-left program, U.S. officials warned of a cut in aid and investment to Nicaragua if Ortega won.
CORRUPTION, POVERTY
Voters in Nicaragua, the second poorest country in the Western Hemisphere after Haiti, apparently ignored the U.S. warnings. They instead punished conservative candidates after three straight pro-U.S. governments failed to tackle poverty and were hit by a series of corruption scandals.
Conservative rival Eduardo Montealegre, who was Washington's favored candidate, trailed with 32.7 percent in the partial results, although he insisted his party's numbers showed he won enough votes to force a runoff next month.
Two election observer organizations -- Ipade and the Ethics and Transparency group -- released quick count results on Monday that both gave Ortega a first-round victory.
Ortega needs 40 percent of the vote, or 35 percent with a 5-point lead, to avoid a runoff he would almost certainly lose as Montealegre would pick up votes from third-placed candidate Jose Rizo.
Still, Montealegre refused to concede defeat and said the election was loaded with irregularities. "This is not over until the last vote is counted," he said.
U.S. officials in Nicaragua said they found irregularities in voting and refused to back the election until the returns were in and problems of polling stations opening late and closing early were investigated.
Roberto Rivas, head of Nicaragua's top electoral body, angrily insisted it was a clean, transparent election.
This was Ortega's third comeback attempt since 1990, when voters weary of the Contra war, a deep economic crisis and Sandinista mismanagement turned against him.
His defeat was celebrated by then U.S. President George Bush, whose son would now have to deal with a new Ortega presidency.
Although Ortega now speaks more of God than revolution, he worries many Nicaraguans who blame Sandinista rule for 30,000 civil war deaths, hyperinflation and rationing in the 1980s.
"That man took our children and sent them to war. We had no food, it was impossible to live here," said Claudia Ruiz, a middle-aged woman in Managua. "How is it possible that people voted for him?"
Ortega supporters say the Sandinistas tried to help the poor but were crippled by a U.S. embargo and the Contra war.
"They never let Ortega govern," said Adela Martinez as she voted on Sunday in Managua. "Let's give him another chance."
By Kieran Murray and Catherine Bremer
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