MEXICO CITY (Reuters) - Mexican President Enrique Pena Nieto's plans for economic reform hung in the balance on Sunday, with his party and the conservative opposition claiming victory in a state election that could shake a fragile cross-party alliance in Congress.
Nearly half of Mexico's 31 states held elections for a mix of local parliaments and municipal governments, but all eyes were on the race for governor in the state of Baja California, a stronghold of the conservative National Action Party (PAN).
Both the PAN and Pena Nieto's Institutional Revolutionary Party (PRI) said they had won the state shortly after polls closed at 6 p.m. local time.
That raises the possibility of tensions in the so-called "Pact for Mexico" that Pena Nieto struck in December with opposition leaders to work together on reforms.
A victory for the PAN in Baja California could prove more useful to Pena Nieto than a win for his own party if it helps strengthen the pact.
The PAN lost control of Mexico in last year's presidential elections, and it is now the third force in Congress. But Pena Nieto needs to keep them on board to push through planned overhauls of state oil giant Pemex and the tax system.
Baja California was one of the PAN's few remaining bastions, and the first state it wrested from the PRI 24 years ago. It proved a major stepping stone to the PAN claiming the presidency in 2000 after 71 consecutive years of rule by the PRI.
During the campaign in Baja California, PAN lawmakers repeatedly accused the PRI of trying to steal the election by buying votes, and they warned that any sign of fraud could scuttle the national pact.
Both PAN chairman Gustavo Madero and his PRI counterpart said on Sunday evening that their candidate had won the governor's office, but there was no independent forecast on the victor. Electoral authorities were expected to provide a preliminary forecast from 11 p.m. ET.
A few hours before the polls closed in Baja California, Madero was asked how he viewed the future of the Pact for Mexico, and said: "What I can say is that the need to reach agreements is still there, it's still imperative for Mexico."
A poll late last month gave the PAN an eight-point lead over the PRI in Baja California, which borders the U.S. state of California.
The PAN's image has been hurt by public, petty infighting since last year's drubbing, when voters punished the party for failing to curb violence between warring drug cartels that has claimed more than 70,000 lives since 2007.
The bloodshed has continued under Pena Nieto's rule and the election campaign was marred by the murder of a number of candidates, with one PAN lawmaker calling it the "most violent" in Mexican history.
Jesus Zambrano, chairman of the leftist Party of the Democratic Revolution (PRD), the other main party in Pena Nieto's pact, demanded authorities clear up the killings, which have also claimed the lives of his party activists.
"In a big part of the states, organized crime is acting in favor of the PRI candidates," Zambrano said.
The PRI has persistently rejected such accusations.
Two more activists were killed over the weekend in Veracruz state, one belonging to the PRI and another to the PRD.
If the PAN loses Baja California, Madero's leadership of the party could be at stake. That in turn could threaten the pact - a fact not lost on Mexicans looking to Pena Nieto to revive the economy.
"The most convenient thing would be for the PAN to win," said Pedro Feria, 32, an out-of-work lawyer who supports the PRI. "What I want is for them to focus on creating job opportunities. I've been looking for a year now."
The pact has already pushed a wide-reaching education reform and a major shake-up of competition in the telecoms sector through Congress, with a separate bill aimed at spurring bank lending expected to pass in coming weeks.
But the central planks of Pena Nieto's hopes to raise economic growth to 6 percent a year from an average of barely 2 percent since the millennium began are reforms to bolster tax revenues and open up Pemex to more private investment.
Those measures may be in doubt if the pact falls apart.
The PAN's Madero had laid the ground for a post-electoral fight, pinning accusations of vote buying, fraud and corruption against the PRI on a giant map of Mexico during the campaign.
PRI chairman Cesar Camacho said many accusations were unfounded and made up to discredit the ruling party. He leveled his own allegations that police were intimidating voters supporting the PRI in Baja California.
(Additional reporting by Tomas Sarmiento and Luc Cohen; Writing by Dave Graham; Editing by Kieran Murray)
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