The two main political parties in Australia have been in contact with Green and Independent MPs with a view to forming a new Coalition.
The two main parties failed to secure enough seats to form a majority Government.
Even though counting has not concluded, both Prime Minister Julia Gillard and her Conservative opponent Tony Abbott have acknowledged that they cannot win enough seats to hold office outright.
Australia is therefore facing the possibility of a hung parliament after the closest fought election in more than 70 years.
Julia Gillard today reassured voters she would deliver ‘stable and effective’ government as parties try to cobble a coalition government after inconclusive elections.
Ms Gillard laid out her claim to remain as leader, saying her Labor Party had won the popular vote in Saturday's polls despite an angry backlash.
'Australia is one of the strongest democracies in the world,’ Ms Gillard told a press conference.
‘We have robust democratic institutions and processes, and as prime minister I will continue to provide stable and effective government in accordance with our democratic process while the final votes are counted in this election.’
She added: ‘There's no uncertainty over the continuity of stable government over this period.’
However, Mr Abbott said Labour was no longer fit to govern.
‘The Liberal and National parties are back in business,’ Abbott told his supporters.
‘We stand ready to govern and we stand ready to offer the Australian people stable, predictable and competent government.'
Mr Abbott promises a tough line on asylum-seekers and a firm hand on the economy, and has delighted in taunting Labor over June's panicked ousting of elected prime minister Kevin Rudd.
‘This election has to some extent at least been a referendum on the political execution of a prime minister,’ Mr Abbott said. ‘The government has lost its legitimacy.’
