But just as gracious in winning was Prime Minister Julia Gillard who pledged in a national televised news conference to work as much as possible with the opposition in the interests of all Australians.

Her cautious choice of words reflected the reality of Labor presiding over the thinnest of majority groupings -- 76 seats -- to form a government in the 150-seat House of Representatives.

''My government will be true to our principles and our beliefs but we will be pragmatic as well in developing effective policies and programs on the major issues that we face," Gillard said.

She promised a ''different style'' of leadership that wasn't one of ''dictating but consulting and inspiring."

Government also would be more accountable than ever to the Australian people over the following three years."

"I want to say to Tony Abbott and the Liberal Party and Warren Truss and the National Party the following," Gillard said.

"I believe the Australian people, given the closeness of this vote, want us to find more common ground in the national interest. I pledge today my best efforts as prime minister to work constructively with you and your colleagues to find common ground where we can."

Gillard also thanked Abbot for his telephone call congratulating her on winning, noting that it couldn't have been easy for him to make the call.

Australia now has its first minority government, defined by the fact that the majority is made of several parties, since the early 1940s.

The election finally was decided 2 weeks after polling day and after dozens of hours of horsetrading between Gillard and Abbott, the opposition coalition leader, on one side and the two independent members of the House on the other.

In the end it was Wales-born Gillard who won over Tony Windsor and Rob Oakeshott. They now back Labor giving it the 76 seats needed.

But media analysts said Gillard faces the unenviable task of operating a razor-thin parliamentary majority that is at the mercy of several independent candidates.

The loyalty to Labor of Oakeshott and Windsor came with a price tag $10 billion for Labor to be spend on health, education and infrastructure development for Australia's diverse regions.

The third independent, Bob Katter, earlier declared for the opposition. But he also said he is reluctant, in the interest of national stability, to consider using his vote to bring down the government.

''I most certainly would see a moral responsibility to look at the issue of stability,'' Katter said.

For his part, Abbott, born in London, said he was disappointed at being denied the opportunity to form government.

''In the end, I wasn't surprised or shocked, I was disappointed," Abbott said.

''I was, nevertheless, grateful for the opportunity over the last fortnight to put my case to the three country independents. I think the coalition offered regional Australia a historic new deal. I'm pleased Bob Katter accepted that, but I'm disappointed the other two didn't.

"My intention, if the government does well, is to give credit where it's due. If the government does badly, it will be held ferociously to account. My challenge now is to ensure that I am not the best opposition leader never to have become prime minister."

Abbott also said he will submit his position to the Liberal Party for it to consider his future as its leader.

But many Liberal colleagues dismissed the idea that there would be a leadership review followed by a convention, seeing as Abbott took on the role only 9 months ago.

Deputy Liberal leader Julie Bishop said Abbott had ''transformed the political landscape in this country'' and had ''secured a place in political history."

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