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Ruling liberal coalition candidate Daniel Martinez was narrowly leading the Uruguay election in the early hours of Monday, according to an official count of just over a quarter of votes, but a determining second round will be needed.

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The liberal Frente Amplio coalition has run Uruguay for more than 14 years, but Martinez, a former mayor of the capital Montevideo, faced a significant challenge from lawyer Luis Lacalle Pou, 46, who may now form a right-wing coalition with small parties to oust him.

With 27% of polling stations counted, Frente Amplio had 36% of the vote compared to the National Party of Lacalle with 35%, the electoral body said.

If no candidate gets over 50% of the vote, the two with the most votes will meet in a run-off on the last Sunday of November.

"I offer my congratulations to my opponent in the second round," Martinez told journalists outside his campaign headquarters.

He added in a tweet: "We will continue doing all we can to ensure stability and certainty. Uruguay has to continue growing, distributing wealth and being a nation of justice."

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