Swiss voters rejected a proposal in a referendum on Sunday to give individual communities the authority to award Swiss passports which would have made it more difficult for foreigners to secure citizenship.

Just under 64 percent dismissed an initiative by the Swiss People's Party (SVP) that the naturalisation of immigrants be decided by a popular vote in the commune where the immigrant lives, the Swiss Federal Government said.

This procedure was banned five years ago after a number of communities repeatedly blocked passport applications and the supreme court judged the method discriminatory.

Only one of the 26 cantons supported the SVP, which is backed by billionaire industrialist Christoph Blocher and has increased its power over the last 10 years by focusing on worries about immigration.

'The right to naturalisation has been cemented with today's decision,' the SVP said in a statement. 'The negative by-products of the mass naturalisation of poorly integrated foreigners, (such as) violent crimes and social abuse, will rise,' the party said.

More than a fifth of Switzerland's 7.5 million residents are foreigners, according to Federal Statistics Office 2006 data, a higher proportion than almost any other European country and due in part to the difficulty of becoming a naturalised citizen.

Already it is hard to gain Swiss citizenship. Candidates must have lived in Switzerland for 12 years and pass tests on Swiss culture and language.

The SVP, which wanted to make it even harder for foreigners to gain citizenship, plastered the country with yellow and black hands grabbing at Swiss passports and sent out literature detailing various crimes committed by immigrants who had been granted Swiss citizenship in the run up to the referendum.

'The rejection of the naturalisation initiative represents the definitive end of the lottery for decisions on naturalisation,' the Social Democratic (SP) party said in a statement. '(The voters) let the initiators' campaign of fear fail,' the SP said.

The SVP's latest campaign contrasts with publicity from the tourist board, welcoming hundreds of thousands of soccer fans who will travel in June to Switzerland and neighbouring Austria for the Euro 2008 soccer tournament.

The SVP drew accusations of racism by rights groups and the United Nations during last October's election campaign for its posters showing a black sheep being kicked off a Swiss flag by three white sheep. - Reuters