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Romania's Social Liberal Union (USL), headed by Prime Minister Victor Ponta, is on course for a convincing victory following Sunday's parliamentary elections, newswires report.

Initial results and exit polls show the prime minister's governing alliance winning anything from 54% to 57% of vote, which would give it a parliamentary majority in the 452-seat legislature. Coming in second was the centre-right group allied to President Traian Basescu, which polled over 18%. The populist People's Party, created in 2010 by media tycoon Dan Diaconescu, came third with 13.53%.

The results will be a blow to Basescu, who had hoped that his parliamentary grouping would win enough to prevent the USL from gaining a majority and allow him to drive a wedge between its members. Ponta's Social Democratic Party is teamed up with wannabe-president Crin Antonescu's National Liberal Party and media tycoon Dan Vioculescu's Conservative Party.

Basescu has indicated that he would refuse to appoint Ponta again if given the chance (the president appoints the PM). That's hardly surprising since Ponta's government tried to remove Basescu from office in an impeachment vote in July, a bid that failed as too few people voted to make the election valid.

Basescu has called Ponta a "compulsive liar" after it became clear the PM plagiarized his doctoral thesis. Ponta says Basescu is a divisive figure who has overstepped his role as president by meddling in government business.

The PM claimed after the exit polls that his ruling leftist alliance has been given a mandate for the next four years and the ability to pursue long-term projects. "We have a huge advantage. Starting tomorrow, we can talk projects for the next four years ... because we have peace and stability," Ponta told reporters in his constituency in Targu Jiu.

However, in the short term, the stand off between the pair is anticipated to create uncertainty. Analysts at Raiffeisen Capital & Investment Research said: "Over the next days we expect further volatility on the markets until the President's nomination of the PM."

The battle between the pair could run until Basescu's mandate expires in 2014. This will dismay many Romanians who are fed up with the power struggle between the leaders at a time when the economy is suffering as the European debt crisis deepens.