Austria votes in tight election with far right bidding for historic win
Freedom Party (FPO) in close race with conservatives
Far-right figure could become chancellor if FPO wins
Nehammer rules out any coalition that includes FPO's Kickl
Recasts, adds details on complaint against party, paragraphs 19-21
By Francois Murphy and Dave Graham
VIENNA, Sept 29 (Reuters) -Austrians voted on Sunday fora new parliament with the far-right Freedom Party (FPO) aiming to secure its first general election win, which could lead to a dispute within the European Union over the war in Ukraine.
The FPO has led opinion polls for months but its lead over Chancellor Karl Nehammer's ruling conservative Austrian People's Party (OVP) has now almost evaporated in a campaign dominated by voter concerns over the economy and immigration.
Whoever wins will fall short of an absolute majority, polls show, but will claim the right to lead a coalition government.
Polling stations opened just after dawn and projections are due minutes after polls close at 5 p.m. (1500 GMT).
"What's at stake is whether the FPO will appoint the chancellor or not," Kathrin Stainer-Haemmerle, political science professor at the Carinthia University of Applied Sciences.
"Should that happen, then I have to say the role of Austria in the European Union would be significantly different. Kickl has often said that (Hungarian Prime Minister) Viktor Orban is a role model for him and he will stand by him."
Nehammer casts himself as a statesman and depicts his rival, FPO leader Herbert Kickl, as a toxic menace. Kickl has styled himself as a defender of Austrian neutrality who will clean up the country after years of establishment failures.
An FPO victory would make Austria the latest EU country to register surging far-right support after gains in countries including the Netherlands, France and Germany.
The Eurosceptic FPO, which is critical of Islam and pledges tougher rules on asylum seekers, won a national vote for the first time in June when it beat the OVP by less than a percentage point in European elections.
The OVP, which like the FPO backs tougher immigration rules and tax cuts, is the only party open to forming a coalition with the far-right party. However Nehammer says his party will not join a government with Kickl in it.
Sarah Wolf, a 22-year-old graphic designer and Austrian Communist Party supporter in Vienna, said tactical voting was worth considering to keep the FPO out.
"What most scares me if the FPO really does get the most votes is we get something like Viktor Orban: a slow, gradual reduction in media diversity, democracy and understanding," she said. "There are just so many really dangerous signs."
Viktor de Lijzer, a 17-year-old soldier who supports the FPO, said the party was best placed to fix what he saw as too much criminal violence spurred by immigration
'FORTRESS AUSTRIA'
Kickl, 55, has thrived as an opposition firebrand but has at times appeared uncomfortable trying to moderate his tone to widen his leadership appeal.
President Alexander Van der Bellen, who oversees the formation of governments, has voiced reservations about the FPO because of its criticism of the EU and its failure to condemn Russia's invasion of Ukraine. The party opposes EU sanctions on Moscow, citing Austria's neutrality.
He has hinted he might thwart Kickl, saying that the constitution does not require him to ask the first-placed party to form a government, even though that has long been the convention.
The FPO, which wants to stop granting asylum altogether and build a "fortress Austria" preventing migrants from entering, was initially led by a former Nazi lawmaker in the 1950s.
It has sought to moderate its image, but new controversy about its past surfaced at the weekend, when a video published by newspaper Der Standard showed members of the party attending a funeral where a song popular with the Nazi SS was sung.
A Jewish student group in Vienna then filed a complaint against FPO members accusing them of breaching anti-Nazi laws.
The FPO did not immediately reply to a request for comment.
Reporting by Francois Murphy and Dave Graham;
Additional reporting by Louis van Boxel-Woolf
Editing by Helen Popper and Frances Kerry
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