Gillard edging Australian election race

A bloc of three independent kingmakers will now decide whether Labour will govern for a second three-year term or whether a conservative Liberal Party-led coalition will form the next administration after August 21 elections failed to give any party a majority.

The conservative coalition now needs the backing of all three remaining uncommitted independents to reach a majority in the House of Representatives, while Labour needs only two.

Independent Andrew Wilkie announced his decision to back Labour after meetings with Ms Gillard and Liberal leader Tony Abbott.

"I have judged that it is in fact the ALP that best meets my criteria that the next government must be stable, must be competent and must be ethical," Mr Wilkie said.

Mr Wilkie became an MP after quitting his job as a defence intelligence analyst in 2003 to protest against the then-conservative government's "grossly unethical" explanation for sending 2,000 Australian troops to back US and British forces in the Iraq invasion.

He said that he expected that his fellow independents - Bob Katter, Rob Oakeshott and Tony Windsor - were now more likely to support Labour after new figures showed the Liberal coalition had overstated savings from their election promises by up to 10.6 billion Australian dollars.

Ms Gillard said that the independent trio had "done the nation a great service" by demanding to see the official costs of both parties' election promises before deciding whom they would support.

Australia will return to the polls if neither leader can secure the support of 76 MPs.