The leaders of Australia's two major political parties began negotiating power deals with independent lawmakers today after the nation's closest election in decades failed to deliver a clear mandate to govern.
Prime Minister Julia Gillard, who remains caretaker leader, said it was clear that no party had won a majority of parliamentary seats in yesterday's poll that delivered an extraordinary voter backlash against her centre-left Labour Party after a single three-year term.
Labour haemorrhaged votes to the environment-focused Greens party as the government was punished for shelving plans to charge major polluting industries for every ton of carbon gas that they emit.
Ms Gillard and Tony Abbott, leader of the conservative Liberal Party, said they had initiated talks with three independents in the House of Representatives as well as the Greens party in a bid to secure their votes in the House of Representatives. Neither revealed what they were prepared to offer in the confidential negotiations.
Both Labour and the Liberal-led coalition have conceded that neither is likely to hold the 76 seats needed to form a government in the 150-seat lower chamber.
"It's my intention to negotiate in good faith an effective agreement to form government," Ms Gillard said.
She suggested that Labour would be better able to get its legislative agenda through the Senate, where major parties rarely hold majorities. The Greens' record support in the polls increased the party's Senate seats from five to nine, giving them the leverage to become kingmaker in deciding which major party controls that chamber.
"So the question before all of us is this: Which party is better able to form a stable and effective government in the national interest?" Ms Gillard said.
But Mr Abbott, who doubts the science behind climate change and rules out ever taxing polluters for their greenhouse gas emissions, said Labour had proved unstable even with a clear majority.
Bitter recriminations within Labour over the election result have begun, with at least one lawmaker who lost her seat blaming her colleagues' dumping of former Prime Minister Kevin Rudd for Ms Gillard. Some lawmakers have blamed the result on a series of damaging media leaks against Ms Gillard during the election campaign which are suspected to be the work of disgruntled Rudd loyalists.
"It's certain that any Labour government emerging from yesterday will be chronically divided and dysfunctional," Mr Abbott said.
Independent Tony Windsor said he planned to talk with fellow independents Bob Katter and Rob Oakeshott today to decide whether to negotiate a power deal with the major parties as a group or individually.
They were the only independents in the last Parliament and are former members of the Nationals party, which is a coalition partner of the Liberals. But all have said they are open to supporting a Labour minority government.
"Whichever side it is, we need to have some stability and maintenance of stability so that the government can actually work," Mr Windsor told Australian Broadcasting Corp television.
"We might end up back at the polls," he added, referring to the possibility of another election if a support pact cannot be negotiated.
Greens party leader Bob Brown said no agreement had been reached after a "cordial" conversation with Ms Gillard, who was seeking the support of newly elected Greens lawmaker Adam Brandt, who previously stated his preference for a Labour government.
Former Greens member Andrew Wilkie, an independent candidate contacted by Ms Gillard, said he would not talk about which party he might support until his own seat was certain.
No Australian government has had to rely on the support of independent lawmakers to rule since 1943. Two independents changed the government in the preceding three-year term by switching their allegiance from the conservatives to Labour.
The election results were expected to be the closest since 1961, when a Liberal government retained power with a single seat, and might not be known for a week.
With more than 78% of the vote counted, the Australian Electoral Commission said Labour had won 70 seats and the Liberal coalition 72. Most analysts agree that the coalition is likely to finish with 73, one seat ahead of Labour.