New Delhi - India's Hindu nationalist Bharatiya Janata Party (BJP) looked set to seize power in the southern state of Karnataka on Sunday, defeating its rival Congress Party in a key local election ahead of national polls in 2009.

The BJP won 110 seats in the 224-member state legislature stopping just three seats short of a simple majority, while Sonia Gandhi's Congress Party won 80 and the Janata Dal (S) won 28, according to Election Commission data. Independent candidates and smaller parties won six.

The results come as a boost for the BJP which is now set to form its first government in a southern state without entering an alliance with other parties.

BJP sources said a few seats would not deter the party from forming a government and the party's BS Yeddyurappa would be sworn in as chief minister on Wednesday.

For the Congress Party, which is a leading partner in the federal United Progressive Alliance (UPA) government, the Karnataka election result is a major blow following a string of defeats in state legislature elections.

The UPA government completes its tenure in 2009 and the latest defeat does not augur well for its prospects in the parliamentary elections, observers say.

Congress Party leaders ascribed the defeat to a division in 'secular' votes, rising prices and internal divisions. Inflation, linked to a wholesale price index, is currently at a four-year high of 7.6 per cent.

The Congress Party was also seen as being soft on terrorism. Karnataka, which as the capital of India's information technology hub Banglaore, has seen rising terrorist activity in the past few years.

The BJP has won elections to state legislatures in Gujarat and Himachal Pradesh states in the past eight months. 'Now, for the first time we are in a position to form a government in a southern state,' BJP's LK Advani, the party's prime ministerial candidate, said in a statement.

'This geographical expansion of the BJP and the simultaneous shrinkage of the Congress Party almost all over the country shows the shape of things to come in the run-up to the next parliamentary elections,' he said.

Local elections are scheduled to be held in several states, including Madhya Pradesh, Rajasthan and Delhi over the next few months.

With the Karnataka victory, the BJP would be in power in eight states and is part of a ruling alliance in four others. The Congress Party on the other hand holds power in 11 states. The rest of India's 28 states are ruled by other parties.