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Labour's Gillard to govern Australia with knife-edge coalition

Prime Minister Julia Gillard will lead Australia's first minority government in 67 years after two independent politicians threw their support behind her centre-left Labour Party today.



The decision ended two weeks of uncertainty left by national elections which finished on a knife-edge.

Australia's first woman prime minister promised that her government would be stable over the next three years, although the defection of a single politician would bring down the Labour administration.

"Labour is prepared to deliver stable, effective and secure government for the next three years," she told reporters.

The independents' support means Ms Gillard can continue with her plans to introduce a 30% tax on iron ore and coal miners' burgeoning profits and make Australia's biggest polluters pay for carbon gas emissions.

Labour gained the ability to form a government for a second term after two independent politicians, Tony Windsor and Rob Oakeshott, joined her coalition more than two weeks after elections failed to deliver a clear winner for the first time since 1940.

Their decision gives Ms Gillard's party control of 76 seats in the 150-seat House of Representatives and avoids the need for another round of polls.

Ms Gillard has rewarded the two rural-based politicians by promising 10 billion Australian dollars (£5.9 billion) in new investment on rural schools and hospitals.

She also announced that she had offered Mr Oakeshott a Cabinet post, which he had yet to accept. Mr Windsor had said he did not want such a job in the government.

Ms Gillard also said she would keep her promise to make her predecessor, Kevin Rudd, a senior Cabinet minister.

Party powerbrokers dumped Mr Rudd for ms Gillard in an internal mutiny in June in a bid to improve Labour's standing in opinion polls.

Rudd loyalists were suspected to be behind a series of damaging leaks to the media against Ms Gillard during her election campaign.

Labour lost 11 seats in the election, many of them in Mr Rudd's home state of Queensland.

Bob Katter, an independent who sided with opposition leader Tony Abbott's conservative Liberal Party, said today that he would have supported Labour if Mr Rudd was still prime minister.

Ms Gillard said voters sent her a message by almost making her government the first to lose power after a single term since 1931.

"What they are asking us to do is not to become waylaid in partisan bickering but to build for the future," she said.

Mr Abbott's coalition won 73 seats and with Mr Katter's support commanded 74 seats. Mr Abbott said today that he was disappointed by the result and said the government should be brought down if it proved to be incompetent.

The August 21 elections were the first since 1940 to fail to deliver a clear winner. That parliament initially chose a conservative minority government, which was brought down when two independents switched their allegiances to Labour.

Mr Windsor and Mr Oakeshott, who have both championed better communications infrastructure for rural areas, said Labour's plan to introduce a 43 billion Australian dollar (£25.6 billion) high-speed optical fibre national broadband network was a major factor in their decision.

Mr Abbott's Liberal Party had promised a smaller, slower 6 billion dollar (£3.6 billion) network with a range of technologies including optical fibre, wireless and DSL.

"What this is, is a hard decision," Mr Oakeshott told reporters in announcing his decision. "There's no question about that. And on my end, it has been an absolute line-ball, points decision, judgment call, six of one, half dozen of the other. This could not get any closer."

Mr Windsor said he believed that Ms Gillard was more likely than Mr Abbott to work constructively with the independents and govern for a full three-year term rather than call an early election.

During intense negotiations with the independents, both Ms Gillard and Mr Abbott had promised that, if they could form a minority government, they would not later call an early election in the hope of winning an outright majority.

Labour won only 72 seats but has enlisted the support of a politician from the Greens party plus three independents.

Liberal Party politicians argue that the Greens' influence will make the Labour minority government Australia's most left-wing government in years.

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