Portuguese seen lodging protest over bailout pain in local polls

By Axel Bugge LISBON (Reuters) - Portuguese voters were expected to punish the ruling centre-right Social Democrat candidates in local polls on Sunday after years of budget cuts and tax hikes under the country's international bailout. A record number of mayoral candidates were standing as independents in the first local election since Portugal turned to the International Monetary Fund and European Union for the 78 billion euro ($106 billion) bailout in 2011. After two and a half years of recession, unemployment is at a record high of about 17 percent. The Social Democrat-led government nearly collapsed in July over an internal dispute about measures that have included the biggest tax hikes in living memory. Big losses at the local level could sap the government's appetite for further action. EU and IMF officials are currently reviewing the bailout and demanding more budget cuts. "There may be a record of around one million votes for independent candidates which could send a serious warning to our political system," said Adelino Maltez, a political scientist at Lisbon's Technical University, predicting "some sort of a tie," with the opposition Socialists. The Socialists could gain from the government's unpopularity, but they were in power when the country had to seek international help. The number of independent candidates also complicates predictions. President Anibal Cavaco Silva said the future of the current government was not at stake. Cavaco Silva worked to maintain political stability during the government crisis in July, emphasizing the need for Portugal to complete its bailout successfully in mid-2014. "It is clear that it (the government) does not depend on this, these are municipal elections," Cavaco Silva told journalists. Opinion polls give the Social Democrats about 27 percent support and their junior coalition partner, the rightist CDS-PP, 6.5 percent. The Socialists have about 38 percent support. A record 80 independent candidates are standing for mayor in the 308 municipalities, up from 54 at the 2009 local elections. Polls close at 1900 (1800 GMT). Officials say results may be delayed because the election is the first since some local councils were merged in an effort to cut costs. Final results may not be available until early Monday. "I know this is a municipal election and I don't really expect it to change much in terms of the government and its course, but hope is the last thing to die," said Rita Carvalho, 32, voting at a busy Lisbon polling station. ($1 = 0.7385 euros) (Additional reporting by Daniel Alvarenga and Andrei Khalip, Editing by Janet Lawrence/Ruth Pitchford)