Billionaire favored in Chile vote but run-off seen

(For full coverage, please click on [nCHILE])

* Polls show Pinera will face January run-off

* No change in economic policy expected

* Nation still split by Pinochet legacy

By Alonso Soto

SANTIAGO, Dec 13 (Reuters) - A conservative billionaire is the front-runner in Chile's presidential election on Sunday but is seen needing a run-off to break two decades of center-left rule since the end of Augusto Pinochet's dictatorship.

Center-right businessman Sebastian Pinera, who has vowed to build on prudent fiscal policies that have made Chile the world's No. 1 copper producer and a regional model of stability, leads by a least 10 points in opinion polls before the first presidential vote since Pinochet died in 2006.

But he is expected to fall short of the outright majority needed for election, setting up a Jan. 17 run-off against Eduardo Frei, a former president from the splintered ruling coalition who is running second. Polls show Pinera winning a runoff by at least 6 points.

It would be the first presidential election victory for the Chilean right in half a century, and a rare win in a region dominated by leftist governments. But few see major macroeconomic and political policy changes whoever prevails. [ID:nN08213803]

Pinera's support has grown thanks partly to widespread disillusionment among voters who feel the center-left bloc has failed to better distribute billions of dollars in copper earnings via social programs. [ID:nN11163285]

"No apologies, much less last-minute ones, can fool or confuse Chileans, who know deep down in their hearts the Concertacion (ruling coalition) has worn out," Pinera told thousands of supporters at his closing rally on Thursday.

Pinera, 60, who made his fortune introducing credit cards to Chile and owns more than 25 percent of regional airline LAN LAN.SN(LFL.N), plans to use corporate tax breaks and job subsidies to lure investment and reinvigorate growth.

A Pinera win is seen giving Chile's stock market a boost. [ID:nN11258946]

VOWS BUSINESS APPROACH TO GOVERNMENT

Pinera, the runner-up in the 2005 presidential election, wants to take a business approach to government and overhaul state copper miner Codelco, the world's largest, to boost an economy clawing out of its first recession in a decade because of the global economic slowdown.

Critics say the Harvard-trained economist would govern like a greedy businessman in a nation still split by the legacy of Pinochet's 1973-1990 iron-fisted rule from which Pinera has long sought to distance himself. Some of his advisers worked under the dictatorship. [ID:nN08215336]

Pinochet overthrew elected socialist President Salvador Allende in a bloody coup and more than 3,000 people were killed or "disappeared" during his 17-year rule.

The youngest voters in Sunday's election were born after Pinochet stepped down and have grown up in a democracy without the shadow of the dictatorship influencing their votes as strongly as it has older Chileans.

Voters will also choose members of the two-chamber Congress that is likely to stay divided, analysts say.

That will force whoever wins to negotiate with rivals to legislate in the country of 16 million that stretches from an arid desert in the north to icy fjords in the far south.

President Michelle Bachelet, constitutionally barred from a second straight four-year term, has been unable to transfer her 77 percent approval rating to Frei, a civil engineer whose 1994-2000 administration was overshadowed by the Asian financial crisis and soaring unemployment.

Frei is running on a pledge of continuity and some of his campaign posters have featured Bachelet prominently. He sees the state as having a bigger role in the economy.

"Not only are we the rightful heirs of President Michelle Bachelet's government, but we will continue with her policies," Frei said during the final days of his campaign.

On Thursday, he accepted a proposal by the fourth-place leftist candidate to form a pact to try to block Pinera's second-round victory.

But opposition to the proposed alliance by independent candidate Marco Enriquez-Ominami, who left the coalition and divided the left, could hurt Frei's chances. (Editing by Simon Gardner and Peter Cooney)