With 60 per cent of ballots counted, officials said  Varela led with 39 per cent of the votes, compared to 32 per cent for former Housing Minister Jose Domingo Arias, the preferred choice of Martinelli. Juan Carlos Navarro, a former mayor of the capital, was in third in the seven-candidate field with 27 per cent.

Varela, who takes office on July 1, dedicated his victory to Panama’s democracy when the Electoral Tribunal’s chief magistrate notified him by telephone of his victory.

The incumbent party has still never won re-election to Panama’s presidency since the United States’ 1989 overthrow of military strongman Manuel Noriega.