Gillard to remain Aussie PM

AUSTRALIAN Prime Minister Julia Gillard retained power by a tiny, one-seat majority yesterday after winning the backing of two key independent MPs in the first hung parliament in decades.

The country's first woman leader, who came to office in a party revolt just 10 weeks ago, scraped over the line to form a government with support from the "kingmakers" after 17 days of frantic post-election negotiations.

"Labor is prepared to govern," a tired-looking Gillard told reporters in Canberra. "I believe the Australian people, given the closeness of this vote, want us to find more common ground in the national interest," she added.

Welsh-born Gillard, 48, narrowly avoided becoming one of Australia's briefest rulers after Tuesday's dramatic denouement, which followed the knife-edge elections on August 21.

Three "kingmakers" split at the last minute, with cowboy hat-wearing maverick Bob Katter siding with conservative opposition leader Tony Abbott — who came within a whisker of snatching a shock election victory.

Centre-left Gillard's rule was finally confirmed after a lengthy address by Rob Oakeshott, the last independent to declare, who prolonged the prime minister's agony.

"I will ... give confidence and supply to government, and in effect that means confidence and supply in Julia Gillard," Oakeshott said.

Gillard said she felt a "solemn responsibility" after her rebuke by voters, who returned the first hung parliament since war-era 1940 despite a roaring mining-led economy which avoided recession during the global financial crisis.

"There's no walking away, no attempt to in some way not understand, the message from the result in the election," she said.

"The Australian people have sent me, sent the Labor Party, sent this parliament a message... (I have) heard that message loud and clear." Gillard ended with 76 seats in the 150-seat parliament, with Abbott's Liberal/National coalition on 74, the closest possible margin, capping a rollercoaster period in Australia's usually staid public life.

"The longest election is finally over," said Abbott, conceding defeat. "The coalition won more votes and more seats than our opponents but sadly we didn't get the opportunity to form government." Gillard staged a shock party revolt against elected prime minister Kevin Rudd in June and announced polls just three weeks later, hoping to ride a wave of public support. But her anticipated honeymoon period failed to materialise as many voters turned to the environment-focused Greens, which enjoyed a record ballot share.AFP