BRASILIA (Reuters) - Brazil's most unpredictable presidential election in a generation is heading toward a photo finish on Oct. 26 between leftist incumbent Dilma Rousseff and pro-business challenger Aecio Neves, two new polls showed on Wednesday.
In an increasingly acrimonious campaign, the candidates traded accusations of lies, corruption and nepotism in a bruising television debate on Tuesday night that had no clear winner and saw more attacks than discussion of policy issues.
Neves, the market favorite, gained ground after his stronger-than-expected showing in the first-round vote on Oct. 5, when he bested environmentalist Marina Silva to place second behind Rousseff.
But Neves has struggled to build on that momentum and has been running neck-and-neck with Rousseff in opinion polls for the last week.
Neves has 45 percent of voter support against 43 percent for Rousseff, according to the identical results of the latest surveys by polling firms Datafolha and Ibope, one percentage point less than each candidate had in previous polls six days ago.
The difference between the two is statistically insignificant because it is within the margin of error of plus or minus 2 percentage points in both polls. Excluding undecided voters, spoiled and blank survey responses, Neves has 51 percent against 49 percent for Rousseff, the same as last week.
"We are heading for a photo finish," said Andre Cesar, a political analyst in Brasilia, who expects the remaining three debates before the vote to get rougher. "If no candidate slips up badly in the next debates, their numbers won't change much."
In the narrowest race since 1989, Brazilians have to choose between re-electing a government that has lifted millions from poverty or switching to more business-friendly policies advocated by Neves to pull the country out recession.
Rousseff warned Brazilians in Tuesday's debate that electing Neves would lead to unemployment and threaten the social benefits gained during 12 years of rule by her Workers' Party.
Neves charged that Rousseff campaign propaganda told lie after lie about him and misinformed voters that he was planning to end cash transfer programs and privatize state banks.
The senator and former state governor hammered Rousseff over a multi-million dollar corruption scandal at state-run oil company Petroleo Brasileiro SA, which prosecutors say was used to channel bribes to the Workers' Party and its allies in the governing coalition.
Rousseff retorted by pointing to an airport that was built adjacent to a farm owned by Neves's uncle when he was governor of Minas Gerais state. She also accused him of nepotism for giving government jobs to a sister, uncles and cousins.
Neves acknowledged big strides had been made in improving the social lot of Brazil's people under Rousseff's mentor and predecessor, Luiz Inacio Lula da Silva. But he said Brazil had stopped growing under Rousseff and inflation was out of control. He vowed to restore credibility and investment flows.
If elected, Neves's future finance minister, Arminio Fraga, said Brazil needed to restore fiscal austerity and a floating currency, policies that gave it stability two decades ago.
"We have to change the current model of a protected economy, less fiscal discipline and excessive focus on consumer demand," Fraga said in a telephone interview. "It's been a total mistake."
Additional reporting by Alonso Soto and Jeferson Ribeiro; Editing by Andrew Hay and Ken Wills