Jan. 27 (Bloomberg) -- Finnish President Tarja Halonen, seeking a second term, faces a runoff election against challenger Sauli Niinistoe that polls show is too close to predict.

Halonen, 62, was forced into the Jan. 29 runoff against Niinistoe, a vice president of the Luxembourg-based European Investment Bank, after first-round voting on Jan. 15 failed to produce a majority winner.

A poll published Jan. 25 by broadcaster MTV3 said 55 percent of Finns who have decided on a candidate support Social Democrat Halonen, while 45 percent would vote for Niinistoe, the same split as the previous poll a week ago. The number of undecided potential voters jumped to 37 percent of those questioned from 32 percent, according to the Research International poll.

``I wouldn't speculate on the outcome of the election as there's still a lot of uncertainty,'' said Juhani Pehkonen, head of opinion polls at researcher TNS Gallup in Helsinki. ``People should view these polls with caution.''

While Halonen, a former labor union lawyer, is still the bookmakers' favorite, her opponent has been narrowing her lead in opinion polls. That has prompted Halonen's supporters, including former Prime Minister Paavo Lipponen and Lauri Ihalainen, head of the country's biggest trade union, to start a campaign against Niinistoe.

The president's decision-making power is limited to foreign and security policy, yet the head of state can still influence a variety of issues as an opinion leader in this Nordic country of 5.3 million people. First results will be announced at 8 p.m. local time and the final score is expected before 10 p.m.

NATO Comments

Lipponen, known for his comments favoring NATO, accused Niinistoe of luring Finland to join the North Atlantic Treaty Organization, a subject that is touchy in the neutral country.

Both Halonen and Niinistoe say a referendum would decide the matter. According to a poll published by broadcaster YLE, a majority of Finns say the country is more likely to join NATO if Niinistoe is elected president.

The candidates are also trying to woo voters of Matti Vanhanen, the country's prime minister and leader of the Centre Party. He was eliminated after finishing third on Jan. 15.

``How well the campaigns of Halonen and Niinistoe can appeal and win supporters of the Centre Party will decide the second around,'' said Heikki Paloheimo, politics professor at University of Tampere, Finland. ``There is no single watershed issue.''

Social Democrats

Halonen, who likes to paint to relax, was elected six years ago, giving the Social Democrats an unbroken hold on the office for the past 24 years. An incumbent president hasn't lost a re- election bid since 1937.

``There also is the split between right and left,'' Paloheimo said. ``How easily could a life-long Centre party supporter vote for a socialist candidate?

The Centre Party has been traditionally popular in rural and northern areas, and both candidates have expressed their close ties to the countryside. Helsinki-native Halonen says one of her relatives is married to a pig farmer, while Niinistoe has spent summers at a farm house in his childhood with his cousin.

The president, who raised a daughter as a single mother, worked for SAK, the country's biggest trade union, from 1970 to 1979. She was elected to parliament in 1979 and remained a lawmaker until elected president in 2000. In a book published in 1987, two years before communism started collapsing in the Soviet Union, Finland's eastern neighbor, she said that major Finnish banks and industrial companies should be nationalized.

Halonen says she's the safeguard of the country's cradle-to- grave welfare system and supports gay rights. She campaigns as ``president for the whole nation'' and describes herself as familiar and trusted.

`Working Class'

Niinistoe, who served as finance minister before taking up his post in Luxembourg, is campaigning as ``president of the working class'' for the National Coalition Party. He has blamed Halonen for a period of stagnation and is an avid roller-blade skater.

The 57-year-old Niinistoe was widowed in 1995 after his wife died in a road accident. He declined to run for the presidency in 2000 when he was the leader in opinion polls. Niinistoe was briefly engaged to Tanja Karpela, winner of the national beauty contest in 1991 and incumbent minister of culture, in early 2000s. He survived the Asian tsunami in December 2004 in Thailand by climbing a telephone-line pole, where he waited for the water to recede.

To contact the reporter on this story: Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net.

Last Updated: January 26, 2006 19:10 EST