Denmark's Social Democratic leader Helle Thorning-Schmidt is set to become the country's first female prime minister, after her center-left bloc narrowly won general elections, ending a decade of center-right rule.

She began talks Friday to form a new government.

Prime Minister Lars Loekke Rasmussen conceded defeat late Thursday.

Ms. Thorning-Schmidt and Mr. Loekke Rasmussen share similar views on the economy, foreign policy, welfare and immigration, but differ in their outlook on taxes.

Ms. Thorning-Schmidt wants to avoid some of the country's planned austerity measures by raising taxes on wealthy Danes and banks. Mr. Loekke Rasmussen had ruled out any tax increases.

The 44-year-old Ms. Thorning-Schmidt is the daughter-in law of British Labor politician Neil Kinnock.