By Wangui Kanina

NAIROBI, Dec 31 (Reuters) - The counting of Kenya's presidential election, which gave Mwai Kibaki a second five-year term, lacked credibility, the chief European Union observer said.

Kibaki's victory triggered deadly riots nationwide drawing tens of thousands of opposition supporters on to the streets.

"The tallying process lacks credibility and despite the best efforts the Electoral Commission of Kenya (ECK) has not fulfilled its responsibilities to create such a process," chief EU monitor Alexander Graf Lambsdorff told Reuters late on Sunday.

The EU had initially hailed Thursday's peaceful presidential and parliamentary elections, and some initially held up the exercise as an example for the volatile continent.

"However, once polling stations closed and the tallying began ... we encountered some irregularities that cast a doubt on the accuracy of the final results that were announced this afternoon," Lambsdorff said.

Kibaki, 76, was sworn in at a ceremony held just an hour after the results were announced by the head of the ECK.

Opposition leader Raila Odinga rejected the results and announced that his Orange Democratic Movement (ODM) would hold an alternative inauguration for Odinga on Monday.

Lambsdorff said his mission would produce a detailed statement, including recommendations for the government, in February.

He said Kenya's 2002 election -- when Kibaki's victory ended the 24-year rule of former President Daniel arap Moi -- had been a real example for the region.

"Our yardstick for the 2007 elections were the 2002 polls. We wanted to maintain the standards for the sake of Kenyan democracy," he said. "In the parliamentary round we can say yes they were successful. In the presidential we have encountered substantial problems ... I believe it is not fair to say the standards have been improved upon." (Editing by Daniel Wallis)

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