ORTEGA

MANAGUA, Nicaragua (Reuters):

Daniel Ortega, a former Marxist revolutionary and U.S. Cold War enemy, headed toward a dramatic return to power in Nicaragua's presidential election, early results showed yesterday.

With returns in from almost 15 per cent of polling stations in Sunday's election, the 60-year-old Ortega had just above the 40 per cent mark that would seal a first-round win and give him back the presidency 16 years after he was voted out at the end of a brutal civil war against U.S.-backed Contra rebels.

If confirmed, it would be an embarrassing blow to the United States, which fears the leftist would join an anti-U.S. bloc in Latin America and had warned of a cut in aid and investment to Nicaragua under an Ortega government.

Thousands of Ortega's Sandinista supporters set off fireworks through the night and raced through the streets waving black-and-red party flags. Senior party members hugged each other, some of them crying with joy, at a party in the capital, Managua.

Conservative rival Eduardo Montealegre, who was Washington's favoured candidate, trailed with 33.3 per cent, although he insisted his party's numbers showed he won enough votes to force a run-off next month.

An independent quick count by a respected group, called Ethics and Transparency, said Ortega scored 38.5 per cent and Montealegre trailed with 29.5 per cent. Ortega needs either 40 per cent of the vote, or 35 per cent with a 5-point lead, to take a first-round victory.