Australia faces a period of political turmoil after Julia Gillard's Labor government lost its parliamentary majority in a general election that looks set to result in the country's first coalition government in 70 years.
The Australian prime minister has begun negotiations with independent candidates after acknowledging that neither her party nor the opposition conservative coalition was likely to win the 76 seats needed for an outright majority in the 150-seat House of Representatives.
"It is clear that neither party has earned the right to government in its own right," she said.
"It's my intention to negotiate, in good faith, an effective agreement to form government."
Gillard said she hoped to enlist support for her centre-left Labor party – which has ruled for three years – and had held preliminary talks with four independents and a Green candidate.
But the opposition Liberal leader, Tony Abbott, said the loss of voter support that cost the government many of its 83 seats showed Australians wanted change.
"It is historically unprecedented for a first-term government to receive the kind of rebuff that [it] received yesterday," he said.
"It's certain that any Labor government emerging from yesterday will be chronically divided and dysfunctional."
The election came two months after Gillard ousted her predecessor, Kevin Rudd, in a controversial Labor leadership challenge.
Independent Tony Windsor said he would talk to fellow independents Bob Katter and Rob Oakeshott today to decide on issues including whether to negotiate a power deal with the main parties as a group or individually.
The three were the only independents in the last parliament, and are former members of the National party – a coalition partner of the Liberals. All have said they are open to the prospect of supporting a minority Labor government.
"Whichever side it is, we need to have some stability and maintenance of stability so that the government can actually work," Windsor told ABC television.
"We might end up back at the polls," he said, referring to the possibility of another election if coalition talks collapsed.
The Green party leader, Bob Brown, said no agreement had been reached after what he said was a cordial conversation with Gillard.
The Greens won support from former Labor voters after the government shelved plans for a carbon tax on big polluters, boosting the number of Green Senate seats from five to nine.
The increase could give the party the leverage to become the kingmaker in a coalition deal.
Voting is compulsory in Australia, which has 14 million registered voters.
Initial counting had given Labor a marginal lead over Abbott's coalition, but other results suggested heavy swings against Labor, particularly in the key states of Queensland and New South Wales.
An Australian government has not had to rely on the support of independents to rule since 1943.
Two independents had changed the government in the preceding three-year term by switching their allegiance from the conservatives to Labor.
