By Idrees Ali and Asif Shahzad
ISLAMABAD (Reuters) - Pakistan's former ruling party conceded defeat to cricket star-turned-politician Imran Khan ahead of final results from the country's disputed election, which European Union monitors said on Friday had not been fought on a level playing field.
Khan, during a speech declaring victory on Thursday, offered to investigate opposition allegations of vote-rigging and said he wanted to "unite" the country under his leadership.
The party of jailed ex-prime minister Nawaz Sharif initially rejected the so far incomplete results, but by Friday its leaders appeared to accept that Khan would be the next prime minister.
"We are going to sit on opposition benches, despite all the reservations," said Hamza Shehbaz Sharif, a parliamentarian and the nephew of Nawaz Sharif, who is in prison after being convicted on corruption charges he disputes.
The allegations of rigging in Wednesday's election followed a bitter campaign in which Pakistan's powerful military was accused of tilting the race in favour of Khan, and trying to erase democratic gains made since the most recent spell of military rule ended in 2008.
The EU Election Observation Mission, in its preliminary findings, said the electoral process was "not as good" as the 2013 election and campaign week featured a "lack of equality" that meant it was not a level playing field for all parties.
"Many of our interlocutors acknowledged a systematic effort to undermine the former ruling party through cases of corruption, contempt of court and terrorist charges against its leaders and candidates," chief EU observer Michael Gahler told a news conference. The mission included 120 observers who visited 582 polling stations in all the provinces except Baluchistan.
Gahler said EU observers had not witnessed any military interference in polling stations they assessed.
"On election day, polling was assessed as well conducted and transparent," he said. "However, counting was somewhat problematic with staff not always following the procedures."
He added later: "The credibility or the legitimacy of this process, that is for the people of Pakistan."
Although Khan appeared likely to fall short of the 137 seats needed for a majority in the National Assembly, his better-than-expected results mean he should have no problems forming a government with a handful of small coalition partners.
One of the first tasks for Khan, once he forms the government, will be to avert a currency crisis, following four devaluations of the rupee currency since December, which will likely require Islamabad to seek Pakistan's second International Monetary Fund bailout since 2013.
The latest Election Commission of Pakistan (ECP) official partial results showed Khan's Pakistan Tehreek-e-Insaf (PTI), or Pakistan Movement for Justice party, had won 115 seats out of the National Assembly has 272 seats in total. The commission was expected to announce full results later on Friday.
Sharif's Pakistan Muslim League-Nawaz (PML-N)had 62 seats, the results showed. The Pakistan Peoples Party (PPP), led by Bilawal Bhutto Zardari, the son of assassinated two-time prime minister Benazir Bhutto, was third with 43 seats.
"(PML-N) would play the role of a strong opposition," said Shehbaz Sharif, the PML-N president and brother of Nawaz Sharif, according to the English-language Dawn newspaper.
BREAKTHROUGH IN HEARTLAND
Khan's party also appears to have succeeded in wresting control of the local assembly in Pakistan's biggest province, Punjab, from the Sharifs.
The News newspaper and other local media reported PML-N was unlikely to form the government in Punjab, home to more than half of Pakistan's 208 million people and the powerbase of the Sharif family for more than three decades.
Shehbaz Sharif has said the vote count was rigged and vowed to offer evidence to the ECP. Both the PML-N and PPP say their party monitors at many voting centres were either kicked out during counting or had not received the official notifications of the precinct's results, instead being given handwritten tallies they could not verify.
Nearly-finalised results also indicated religious parties that fielded more candidates than ever before failed to win any National Assembly seats.
The Allahu Akbar Tehreek party of Hafiz Saeed, who is accused of masterminding the 2008 attacks that killed 166 people in the Indian city of Mumbai, did not win a single seat. Neither did candidates linked to Sunni extremist group Ahl-e-Sunnat Wal Jamaat.
Tehreek-e-Labaik Pakistan, which campaigns under the rallying cry "Death to Blasphemers" also failed to win any seats, although results indicate it garnered a large following across Punjab.
(Additional reporting by Syed Raza Hassan; writing by Drazen Jorgic; Editing by Raju Gopalakrishnan and Alex Richardson)