Spain's ruling Socialist party last night won a second term with an expanded majority in a general election overshadowed by the resurgence of Basque terrorism and a slowing economy.

The result is a big personal victory for José Luis Rodríguez Zapatero, Socialist leader and prime minister, who emerges with a second successive victory against the opposition Popular party. Mr Zapatero said he hoped the results would usher in "a new era free of tensions" to overcome the bitter divisions that have plagued Spanish politics since the 2004 Madrid train bombings.