Portugal’s ruling Socialist Party gained ground in this week’s local elections at the expense of the communist-led alliance.

Prime Minister Antonio Costa’s Socialists came top in 158 of the country’s 308 biggest municipalities, holding the capital Lisbon but failing to take Porto from an independent.

The Socialist Party vote exceeded 38 per cent, up from its 2015 general election share of 32 per cent.

The biggest losers were the right-wing Social Democrats (PSD) on 16 per cent, who came third in the two main cities and lost 10 town halls.

The result looks likely to precipitate an internal party crisis and may see Pedro Passos Coelho lose his job as PSD leader.

But the Unitary Democratic Coalition (CDU) — made up of the Portuguese Communist Party (PCP), the Greens (PEV) and the Democratic Intervention — lost its majority on 10 councils, leaving it with 24, after netting just about 9.5 per cent of the vote.

They included the long-standing communist strongholds of Almada and Barreiro in Lisbon’s “red belt.”

The Left Bloc, which comprises Trotskyite, Maoist and Eurocommunist groupings, received just over 3 per cent and failed to win any municipalities.

PCP general secretary Jeronimo de Sousa insisted: “The result does not reduce the real influence of the PCP and PEV.”

He said voters had recognised the alliance’s “decisive role in the new phase of the political life, the role that they will continue to play in dynamising the struggle.”

Both the PCP and the Left Bloc have separate agreements to support the socialist government on the condition that it enacts measures to roll back privatisation and protect wages and benefits.