Ireland's main parties hold steady as Sinn Fein slumps in local vote

DUBLIN (Reuters) - Ireland's two largest parties held their own in local elections on Sunday in a bad day for left-wing Sinn Fein, whose political ascent in the republic suffered its first major setback.

With more than three quarters of the 949 seats announced, Prime Minister Leo Varadkar's Fine Gael party rose to 24.9% from 24% five years ago. It still trailed fellow centre-right party Fianna Fail, whose share rose to 26.9% from 25.5%.

Sinn Fein - the former political wing of the Irish Republican Army (IRA) who established themselves as the third largest party in Ireland two decades after their members were banned from speaking on Irish media - fell to 9.6% from 15.2%.

The result was a setback for Mary Lou McDonald who succeeded Gerry Adams a year ago amid hopes a younger leader would broaden the Irish nationalist party's appeal and advance its ambition of governing on both sides of the Irish border.

The biggest gainers were the Green Party, which, after topping polls by significant margins in some urban areas, was set for an almost four-fold increase to 5.7%. Such a showing could leave them as kingmakers if repeated at a parliamentary poll. [nL5N23207E]

A similarly fragmented result in 2016 parliament elections resulted in Fine Gael leading a minority government with a handful of independent lawmakers and the backing of Fianna Fail from the opposition benches.

With that Fine Gael-Fianna Fail agreement set to run out early next year, Varadkar said he could not rule out a national election in the coming months although senior ministers have cautioned that Brexit will continue to weigh on any decision to go to the polls this year.

(Reporting by Padraic Halpin; Editing by Andrew Heavens)