UPDATE 1-Serbia's parliament elects hardline speaker

(Adds Nikolic quote)

By Beti Bilandzic

BELGRADE, May 8 (Reuters) - Serbia's parliament elected Tomislav Nikolic of the ultra nationalist Radical Party as speaker on Tuesday, a decision some politicians said signalled a return to the isolationist nationalism of the 1990s.

The Radicals, Serbia's strongest party, are heirs to the nationalist mantle of the late Slobodan Milosevic, who led the country into four wars, and are hostile to the EU membership goal of President Boris Tadic's pro-Western Democratic Party.

Serbia has been plunged into new political turmoil since the weekend when efforts to cement a pro-Western coalition government after inconclusive Jan. 21 national elections collapsed, with Prime Minister Vojislav Kostunica and Tadic blaming each other for failing to cut a power-sharing deal.

Nikolic, backed by Kostunica's Democratic Party of Serbia (DSS), won 142 votes from the 244 deputies present in the 250-seat parliament to secure the third most powerful political post in the Balkan country.

He is deputy leader of the Radicals whose leader Vojislav Seselj is on trial at the U.N. war crimes tribunal in The Hague. He also won the support of the Socialists once led by Milosevic.

Both parties oppose handing war crimes fugitive General Ratko Mladic over to the tribunal, a key European Union demand blocking Serbia's membership hopes.

EU foreign policy chief Javier Solana said he telephoned Tadic and Kostunica on Monday to try and broker a deal but to no avail. He said the election of Nikolic would be a "big problem".

FRUITLESS TALKS

The parliamentary session, only the second since the Jan. 21 elections, was convened after weeks of fruitless coalition talks between the DSS and the Democratic Party.

Kostunica's support for Nikolic's candidature was widely seen as a possible precursor to an alliance with the Radicals, or a way to pressure Tadic's Democrats to give in on some of their demands and join Kostunica on his terms.

If there is no government by May 14, new elections must be called. The campaign could coincide with the traumatic loss of Serbia's treasured Kosovo province, whose Albanian majority expects to win independence with Western backing.

The Radicals and Socialists are cool towards the EU and NATO, which Tadic and the pro-Western majority want Serbia to join, and suspicious of economic liberalism and market reforms.

"I am not a danger to Serbia ... I am not a danger to anyone's children as I heard said in parliament tonight," said Nikolic.

But critics said his election was a setback.

"Macedonia, Bosnia and Albania will overtake us and Serbia will be the poorest country in Europe," said senior Democratic Party official Dusan Petrovic.

Former Finance Minister Mladjan Dinkic said Serbia was "now entering a period of major political instability".

Nikolic personified the disastrous policies of Milosevic, who was ousted in 2000, he said.

Dinkic said Kostunica, who succeeded Milosevic, was betraying his reformist credentials by backing the Radicals and calling Tadic's Democrats traitors for allegedly doing the bidding of the West. (Writing by Ellie Tzortzi; editing by Ralph Gowling; Belgrade Newsroom))