Dutch Prime Minister Mark Rutte says the Netherlands has rejected "the wrong kind of populism" as he celebrated victory in parliamentary elections.
With nearly all votes counted his governing centre-right VVD party easily beat the anti-immigration, anti-EU Freedom party of Geert Wilders.
The race was seen as a test of support for nationalist parties that have been gaining ground across Europe.
Mr Wilders insisted "the patriotic spring" would still happen.
With more than 90% of votes counted, the VVD had won 33 out of 150 seats, a loss of eight seats from the previous parliament.
Mr Wilders' Freedom Party (PVV) was in second place on 20 seats, a gain of five, with the Christian Democratic Appeal (CDA) and the liberal Democrats 66 (D66) close behind with 19 seats each.
The Green-Left party also did well winning 14 seats, an increase of 10.
The Labour Party (PvdA), the junior party in the governing coalition, suffered a historic defeat with only nine seats, a loss of 29.
Turnout was more than 80%, the highest for 30 years, which analysts say may have benefited pro-EU and liberal parties.
In the run-up to the election, some opinion polls had forecast the PVV winning the biggest number of seats, sending alarm bells ringing across European capitals.
Mr Wilders had pledged to take the Netherlands out of the EU, close all mosques and ban the Koran.
Image copyrightAFPImage captionGeert Wilders said his party's gains were "a result to be proud of"
"The Netherlands said 'Whoa!' to the wrong kind of populism," said Mr Rutte, now poised for a third successive term as prime minister.
"We want to stick to the course we have - safe and stable and prosperous."
Mr Rutte's victory was warmly greeted by other European leaders.
French President Francois Hollande said Mr Rutte had won a "clear victory against extremism" while German Chancellor Angela Merkel's chief of staff, Peter Altmaier, tweeted: "The Netherlands, oh the Netherlands you are a champion! Congratulations on this great result."
Many had been watching the vote in the Netherlands closely, as an indication for how populist parties may fare in other elections in EU countries.
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