Spain's "Indignado" protest movement has given its ruling conservative rivals a battering in local elections, topping the vote for mayor in Barcelona and shattering the ruling party's majority in Madrid.

In a dramatic shakeup of Spanish politics, an upstart group backed by the anti-austerity protest party Podemos could govern the capital, a longtime conservative stronghold, the official count showed.

The new political groups, Barcelona En Comu and Ahora Madrid, were formally launched just a few months ago but have already started to break the grip of the two big parties that have run Spain for nearly four decades.

The new groups were born out of the "Indignado" ("Outraged") protests that swamped Spanish streets during recent years of economic crisis, campaigning against corruption and unemployment.

Ahora Madrid, led by 71-year-old retired judge and grandmother Manuela Carmena, came second behind Spain's governing Popular Party (PP) but could govern the city if it joins forces with another party.

That would be a stunning setback for the PP, which has governed the city for 23 years, and for Prime Minister Mariano Rajoy as he fights to stay in office in a general election due around November.

In Spain's second-biggest city Barcelona En Comu won the most votes and one more council seat than its nearest competitor, but faces a tricky job forging a coalition among a mixture of small rival parties.

Analysts say the new groups could shatter the two-party system that has dominated Spain since it emerged from dictatorship in the late 1970s.