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By Julio Villaverde
MONTEVIDEO (Reuters) - A straight-talking former guerrilla fighter is expected to win Uruguay's presidency on Sunday, extending the rule of a leftist governing coalition popular with Uruguayans for its handling of the economy.
Polls show Jose Mujica holding a lead of between 6 and 10 percentage points over his rival, centre-right former President Luis Lacalle in the run-off.
Mujica is a 74-year-old former senator who helped wage an urban guerrilla war in an attempt to weaken Uruguay's conservative government during the 1960s and 70s.
If elected, Mujica would succeed President Tabare Vazquez, Uruguay's first socialist leader, who leaves office highly popular after guiding the country out of an economic slump and driving down unemployment despite the global slowdown.
Mujica hailed Brazilian President Luiz Inacio Lula da Silva and his government on the campaign trail, signalling he does not intend to draw Uruguay closer to more radical leftists in Latin America led by Venezuela President Hugo Chavez.
Mujica finished first in a first-round presidential vote last month with 47.96 percent, but fell short of the outright majority needed to avoid a run-off. Lacalle took 29.07 percent. The top vote-getter on Sunday will capture the presidency. The winner takes office on March 1.
A public opinion survey published by the Interconsult polling group on Wednesday showed Mujica with 49.6 percent support of Uruguayans, compared to 42.1 percent for Lacalle.
Voting is compulsory in Uruguay.
The election in one of Latin America's most stable economies has been marked by Mujica, a leftist and once a member of the Tupamaros Marxist guerrilla movement, and Lacalle, a conservative from the National Party, both vowing to leave the country's economic policies untouched.
"Common sense tells us, if something is working, there's no need to tinker with it," Mujica said this week as he unveiled his economic team.
MODERATE RUNNING MATE
His guerrilla past has stirred concern among some Uruguayan business leaders and middle-class voters. Mujica has sought to send a signal of economic continuity by choosing Danilo Astori, Vazquez's former economic chief, as his running mate.
A former agricultural minister, Mujica was jailed for 14 years, most of the time during Uruguay's 1973-85 military dictatorship, for his activities with the Tupamaros, which battled security forces and kidnapped government officials.
The Tumparamos eventually moderated and transformed into a political party, and together with socialists and other leftist parties now make up the Broad Front coalition, which took power in 2005 amid South America's political shift to the left.
Lacalle, a 68-year-old lawyer, has made a surprise comeback since his 1990-1995 presidential term ended with corruption accusations involving serval top aides.
But Lacalle has struggled to win support from some supporters in the second-leading opposition force, the Colorado Party. Its candidate placed third in the initial vote, and Lacalle needs support from the party to have a chance to defeat Mujica, according to Ignacio Zuasnabar, a political analyst with the Montevideo-based Equipos Mori polling group.
"It's very difficult to force an electoral change when the outgoing government is as popular as this one and economic confidence is as high as it is," Zuasnabar said.
Lacalle favours smaller government, promises to fight crime and has pledged to roll back Vazquez's tax hikes on the wealthy to fund social spending that has helped expand health care.
The economy in this predominately beef-producing country of 3.3 million has grown an average of 5.7 percent since 2003, powered by agricultural exports. The government expects the economy to expand 1.2 percent this year. Joblessness stands at just over 7 percent.
The two candidates offer differing political styles.
Mujica, who is popular with the Uruguayan poor and working class, is both lauded by some of his supporters and eyed with caution by his critics for being outspoken and blunt.
He made headlines in neighbouring Argentina earlier in the campaign after he called Argentines "hysterical" and "stupid" in a series of interviews for a book intended to promote his presidential bid.
Lacalle has tried to shake off a public perception that he is tied to the political elite.
(Additional reporting by Guido Nejamkis, Conrado Hornos and Patricia Avila; Writing by Kevin Gray; Editing by Will Dunham)

Reuters