MIAMI, (Reuters) – Antigua and Barbuda Prime  Minister Baldwin Spencer has been hit by a legal challenge that  could loosen or bring a sudden end to his hold on power in the  Caribbean country.

A high court judge ruled on Wednesday that voting  irregularities, which caused the late start of balloting in  three districts, nullified last year’s election of Spencer and  two of his United Progressive Party’s lawmakers.

The UPP, which holds a wafer-thin majority in Parliament,  said it would appeal the decision. But unless it is overturned  it could prompt a special election in the three districts in  dispute or even a new general election.

Either way it could potentially strip the ruling party of  its majority, fueling further instability in the nation of  85,000 people.

Antigua’s economy and reputation as an offshore financial  center were badly damaged by last year’s scandal involving  accused swindler Allen Stanford and what U.S. authorities have  described as his Antigua-based $8 billion Ponzi scheme.

A government spokesman was not immediately available yesterday for comment. But in a statement after the judge’s  ruling on Wednesday, Spencer said there was “no immediate  constitutional crisis” in the tiny northeastern Caribbean  nation.

“As far as the government of Antigua and Barbuda is  concerned we are still functioning,” said Spencer.

“We have already been granted a stay of execution,” the  prime minister added, referring to the judge’s ruling.

“So at least we know that as far as the governing of  Antigua and Barbuda is concerned, the UPP government is still  in charge of the affairs of this nation.”

In Antigua’s March 2009 elections, the UPP won nine of 17  parliamentary seats. The party had held 12 seats in the  previous parliament.

The opposition Antigua Labour Party, led by former Prime  Minister Lester Bird, won seven seats and the Barbuda People’s  Movement won one seat.