Incumbent Sergei Sobyanin just crept over the finish line to win 51.3 per cent of votes in yesterday's poll, which analysts saw as a crucial test of the protest mood in Russia more than a year into President Vladimir Putin's new Kremlin term.
Navalny, who campaigned under the shadow of a controversial conviction for embezzlement, polled far more strongly than projected with over 27.2 per cent, but contended the results were falsified and demanded a run-off.
Sobyanin, a long time ally of Putin, won 51.37 per cent of the vote and Navalny 27.24 per cent, the Moscow election commission said, in a count based on 100 per cent of polling stations reporting.
But Navalny, 37, insisted that Sobyanin had polled less than 50 per cent and demanded a vote recount.
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"We do not acknowledge the published results," he said on his blog today. "They are fake," he added, noting he was ready to hold talks with Sobyanin's team.
Voter turnout in the mayoral race stood at a meagre 32 per cent which appeared to have helped Navalny, with the protest leader far more successful in bringing out core support than Sobyanin's distinctly low-key push for votes.
The candidacy of the charismatic anti-corruption crusader Navalny made the race the first genuinely competitive Russian election since the heady early post-Soviet years.
It was also the first time in a decade the Kremlin had allowed Muscovites to elect their mayor and Sobyanin clearly wanted to pick up popular legitimacy after being appointed in 2010 to replace longstanding mayor Yury Luzhkov.
"If there had not been the range of violations that we saw, there would have been a second round," said spokesman Fyodor Bogdanovsky.
Before the election, nearly all pollsters had forecast Navalny would receive 20 per cent of the vote.