Mexico's electoral crisis deepened today after a recount separated the two leading candidates by less than 0.5 per cent of the vote and the leftist, Andres Manuel López Obrador, called his supporters onto the streets to protest against the result.

With 99.48 per cent of the vote reviewed by election officials, Felipe Calderon, a pro-business former energy secretary, led Señor López Obrador, a former mayor of Mexico City, by 0.41 per cent, or just 170,000 of the 41 million votes cast on Sunday.

Señor Calderon appeared relaxed at a party in the headquarters of the ruling National Action Party (PAN), saying: "Now is the hour for unity and agreements between Mexicans."

But Señor López Obrador said he would challenge the result in Mexico's highest electoral court, the Federal Electoral Tribunal. He asked his supporters to rally in Mexico City's huge Zócalo square on Saturday afternoon.

"We have taken the decision to challenge the electoral process," he told a press conference. "We cannot recognize or accept these results. There are lots of irregularities."

Señor López Obrador's comments increased the likelihood that Mexico's electoral stalemate could drag on for months. The final deadline for a result is September 6, three months before the outgoing President, Vicente Fox, leaves office at the end of his six-year term in December.

His remarks also raised the spectre of violence. After a vicious, two-year election campaign that exposed Mexican regional and class differences, there have been fears that the disputed election could trigger massive demonstrations.

Today was the first time that either of two candidates have called their supporters onto the streets since they both declared victory on Sunday night.

While maintaining that his lead is "irreversible", Señor Calderon has proved the more conciliatory of the candidates, promising Señor López Obrador a seat in the Cabinet of a broad coalition government.

Mexico's financial markets have also welcomed each piece of good news for Señor Calderon. The stock exchange rose 2.5 per cent this morning when his narrow lead was confirmed.

Señor López Obrador was leading the official review of Sunday's vote until 97 per cent of the ballot papers had been checked. Officials from the Federal Electoral Institute (IFE) did not recount each vote by hand but compared the various tallies on counted packets of ballot papers, checking for anomalies.

Señor Calderon's supporters said the late rally was because Obrador loyalists had delayed the review at polling stations in the heartlands of PAN.

Señor López Obrador, whose Party of the Democratic Revolution (PRD) was founded by a populist famously cheated of the presidency in a rigged election in 1988, has alleged throughout the week that PAN activists had counted votes twice in some districts and ignored votes in others.

Today he said that a case before the Federal Electoral Tribunal would expose the "lack of transparency, the lack of independence of the electoral body".

"We have triumphed and this is what we will demonstrate to the tribunal," he said.

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