Stefan Lofven became the first Swedish prime minister to lose a no-confidence vote, throwing the Scandinavian country’s politics into turmoil as it continues to struggle with the emergence of a large, populist, anti-immigration party.

Lofven, leader of the centre-left Social Democrats, lost the vote in Sweden’s parliament by 181 votes to 109. He said on Monday that he would take the next seven days, as he is allowed to do, to decide whether to call snap elections, form a new government or resign.

The vote was sparked by anger from the ex-communist Left party at proposals to scrap rent controls for new apartments, leading them to team up with the rightwing opposition including the populist Sweden Democrats.

Lofven told the Financial Times it was “a totally new landscape” in which the extreme left and right joined forces. He added that politicians had to show voters they can handle such a fragmented parliament with eight parties in it.

“With the pandemic and economic crisis we need to show leadership now. It’s Sweden’s best [interests] that we are focusing on,” he said.

Swedish politics has been struggling for more than a decade to deal with the rise of the Sweden Democrats, who first entered parliament in 2010 and came third in the last elections in 2018 with 17.5 per cent. Their rising support has upturned the traditional left-right divide in Swedish politics.

Long pariahs owing to their neo-Nazi roots, the Sweden Democrats have come in from the cold in the most recent parliament as they seek to co-operate with the two main centre-right opposition parties, the Moderates and Christian Democrats.

The Sweden Democrats called the no-confidence vote, seeing the opportunity to use the Left’s dissatisfaction to reach a majority in parliament against Lofven even as Sweden continues to struggle with the Covid-19 pandemic.

“This government is not only harmful but also historically weak and totally incapable of solving the problems that the citizens of our country face every day,” Jimmie Akesson, leader of the Sweden Democrats, told parliament on Monday.

The Social Democrats called the teaming up of Left and the Sweden Democrats against Lofven “an unholy alliance”.

Sweden’s politics has become so fragmented that forming a coherent government is tricky both in the current parliament and on projections from opinion polls if there are snap elections, political scientists say.

Lofven still has a chance of carrying on, either as head of a caretaker administration or by tweaking his minority coalition that includes the Green party and has had the support in parliament until now of the Centre party and the Left.

Ulf Kristersson, leader of the main centre-right opposition Moderates, said that excluding the Sweden Democrats from political discussions — as the Social Democrats continue to do — would lead to “polarisation and mistrust”.

If snap elections are called, the centre-right is likely to campaign on immigration, integration and the rising levels of violent crime that Kristersson described last year to the Financial Times as “a second pandemic”.