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Brazilian President Luiz Inacio Lula da Silva re-election will head into an October 29 runoff leading his closest rival.

SAO PAULO, Brazil (CNN) -- Brazilian President Luiz Inacio Lula da Silva fell short of outright re-election but will head into an October 29 runoff leading his closest rival.

With 98 percent of the votes in, the socialist da Silva -- commonly known as "Lula" -- had 48.8 percent of the vote.

Aides to the onetime shoeshine-boy-turned-trade activist told reporters that Lula would have to face a second round of balloting in four weeks.

Social Democrat Geraldo Alckmin had 41.4 percent of the vote after a strong showing in Brazil's most populous state, Sao Paulo, where he served as governor from 2001 to early 2006.

Lula polled well in the poorer northeast, where his expanded social spending has had the greatest impact. (Brazilians turn out to vote)

Since taking office in January 2003, Lula has led Brazil on a more assertive course overseas, opposing U.S. plans for a hemispheric free-trade zone and commanding the U.N. peacekeeping mission in Haiti.

For months, polls have shown da Silva easily winning the race, The Associated Press reported.

But da Silva, saw his once-commanding lead plummet on the eve of the vote as his Workers' Party was battered by allegations that party officials tried to buy a mysterious dossier that apparently contained incriminating information about a political rival. (Full story)

Major newspapers ran front-page photos over the weekend showing piles of money allegedly meant to buy information showing corrupt dealings by an opponent. Local media reported the photos were leaked by federal police.

Da Silva's party claimed that Alckmin's supporters were involved, and filed a complaint Sunday with a judge demanding that Alckmin's candidacy be declared invalid because of the leak, AP reported. The judge has said he would consider the case. Alckmin's campaign has denied involvement.

Six members of da Silva's party, including an old friend who ran his personal security detail, face arrest warrants for their alleged roles in efforts to buy the damaging information and da Silva fired his campaign manager days before the election. The president has repeatedly denied knowledge of any wrongdoing.

Reduced poverty

Da Silva's efforts to reduce poverty played well in the slums of Sao Paulo and Rio de Janeiro.

"Zero Hunger," his expanded food stamp-like program, guarantees about $30 a month to virtually all poor families provided they vaccinate their children and keep them in school. It distributes $325 million a month to 45 million of Brazil's 187 million citizens. The program has helped millions of Brazilians out of poverty, studies show.

More than 126 million Brazilians voted in the election for the president, governors for all 26 states and the federal district, all 513 federal deputies of the lower house and 27 of the 81 Senate seats.

Voting is mandatory in Brazil and those who fail to justify their absence both within Brazil and abroad may be fined.

A poor farmer's son who became a fiery union leader and was later elected as Brazil's first leftist president, da Silva surprised many by governing as a moderate once taking office. His deft handling of the economy won him backing on Wall Street and in Brazil's shantytowns. His second-term priorities include reforming the tax and labor rules.

Da Silva's change in style didn't mean embracing the politics of Washington. He clashed with U.S. President George W. Bush over a U.S. proposal to create a continental free-trade area, having termed it a U.S. scheme to "annex" Latin America. Largely because of Brazil's opposition, the free-trade area never took off.

In another race, former President Fernando Collor was elected to Brazil's Senate from the state of Alagoas.

Collor had been impeached on corruption charges and driven from office in 1992.

Journalist Tom Hennigan contributed to this report