South Africa's African National Congress (ANC) was dealt a stinging blow in last week's municipal elections, near-complete results showed on Sunday, weakening its hand in the coalition talks that will follow to form city governments.

With 99% of votes counted, the ANC had 31% against 25% for its main rival, the Democratic Alliance (DA). Former President Jacob Zuma's party uMkhonto weSizwe had about 10% of votes, putting it in third place, while the rest was split between hundreds of smaller parties.

Final results are expected to be announced at 6 pm (16:00 GMT).

The outcome marks a major setback for the ANC, which has seen its vote-share fall steadily in local elections over the last 15 years largely due to concerns over basic services such as water and electricity.

'Catastrophic' outcome

Since no party won more than 50% of votes in many cities including South Africa's commercial hub Johannesburg, the ANC and DA will have to team up, or hash it out with smaller parties to form majority municipal governments.

ANC Secretary-General Fikile Mbalula called the result "catastrophic" for the ANC but said the party would not go begging for positions when coalition talks begin soon.

"When the people tell us we have fallen short... the honest answer is not to argue with them but to go home and put our house in order," Mbalula said on Saturday. Parties will have 14 days to negotiate before city councils are formed.

In Johannesburg, the DA led the count with about 35% of votes, compared to 20% for the ANC.

DA secures highest votes in Johannesburg

That could give DA veteran Helen Zille, who had campaigned on fixing potholes and leaking water pipes, a good chance of becoming mayor, depending on the coalition agreements reached.

The DA said in a statement that it would initiate coalition discussions with "political parties that share a commitment to clean and accountable government, rooting out corruption, service delivery for all, the rule of law, and non-racialism".