Stefan Lofven announced on Wednesday that the parliamentary polls would be held on March 22, highly unusual for what is often considered one of Europe's most stable democracies.

The far-right Sweden Democrats party voted with the centre-right opposition with the aim of toppling the new coalition in response to the government's pro-immigration policies.

That meant 182 lawmakers voted against the government budget and only 153 in favour.

"The Sweden Democrats want the election to be a referendum on immigration," the party's interim leader Mattias Karlsson said, according to Swedish news agency TT.

Lofven on Wednesday lambasted the four parties in the centre-right opposition for allowing "the Sweden Democrats to get decisive influence".

"They are letting the Sweden Democrats dictate the conditions in Swedish politics," he said.

"I have taken responsibility all along and intend to continue taking responsibility for our country. I will not tacitly accept what is now happening on the right wing," he said.

The opposition, on the other hand, criticised Lofven's coalition for allowing the crisis to happen.

"This is a clear failure for the Social Democrats," said Annie Loof of the Centre Party, one of the parties in the opposition bloc, the Alliance.

"Their government's competence has really been put in question," she was quoted as saying by TT.

The anti-immigrant Sweden Democrats' move to rebel against the budget proposal was considered a major political breakthrough for the group that became the country's third-largest party in the 349-seat parliament in September's general elections.

Lofven became prime minister in October as head of a coalition with the Greens, promising to reverse many reforms by the previous centre-right government.