The Telugu Desam Party, whose leader Chandrababu Naidu won international fame for championing the hi-tech industry, grabbed only 49 seats in the 294-member assembly in southern Andhra Pradesh state, poll officials announced.

Congress and allies won 220 seats and others 25 in Andhra Pradesh, our correspondent Pallab Bhattacharya reports from New Delhi.

"We accept the people's verdict," said Chief Minister Naidu after results showed his Telugu Desum Party facing massive rejection in the state elections.

The defeat of the reformist chief minister was also bad news for Prime Minister Atal Behari Vajpayee's Bharatiya Janata Party (BJP)-led coalition, AFP reports.

While voter exit polls say the ruling BJP alliance will grab the biggest number of seats, it may find it a battle to secure a majority when the general election results are announced Thursday.

In the last parliament, the BJP alliance had the support of 29 Telugu Desam and seven BJP MPs from Andhra Pradesh. But Naidu's defeat could mean a similar fall in support for the coalition from Andhra Pradesh at the national level.

With Naidu's ouster, top BJP leaders were due to meet at Vajpayee's residence yesterday to take stock of the situation.

Two television exit polls from the world's largest election, in which 370 million people voted on five dates ending Monday, showed the BJP-led coalition would narrowly secure a parliamentary majority or be within striking distance of the 272 seats needed to form a government.

But three other polls predicted it could fall adrift by 24 to 42 seats.

As the BJP and the main opposition Congress party looked to woo small parties to support the next government, media reports said the ruling party was divided on how to deal with a worst-case scenario.

The Times of India reported that Vajpayee favoured sitting in the opposition if the BJP-led coalition fell below 250 seats.

But Deputy Prime Minister Lal Krishna Advani, considered further to the right politically than Vajpayee, wants to rope parties into a broad BJP-led coalition even if the Hindu nationalists perform poorly, the report said.

The chances of Congress and its allies of forming a government appeared to be dim, with exit polls showing them winning between 171 and 191 seats.

However, Congress, which ruled India for 45 years but has been out of power since 1996, won a boost yesterday with an offer of support from the Communist Party of India-Marxist, the third largest party in the last parliament.

"We will all work together. It will be a coalition government and not that of any party," communist leader Harkishen Singh Surjeet said after a meeting with Sonia Gandhi, the Italian-born Congress chief.

In a bid to lure smaller parties, Congress late Monday announced it would select a prime ministerial candidate by consensus with its partners if they mustered a majority.

It said it would not insist on Sonia Gandhi, who opponents say should not lead India because of her foreign origin. Gandhi became an Indian citizen after her marriage to Rajiv Gandhi, a former prime minister slain in 1991.

Mulayam Singh Yadav, leader of the influential regional Samajwadi Party in politically key Uttar Pradesh state, told The Hindu newspaper he would join the BJP-led coalition only if he became prime minister or deputy prime minister.