Live updates: Independents will be key

Projections: Labour 70 Coalition 73 (first to 76 wins)
What you need to know about the Ausssie election

1.38am: Thanks for following our coverage of the Australian election. We'll have full coverage of the continuing election battle over the coming days and weeks. Goodnight and cheers.

1.20am: Prime Minister Julia Gillard has spoken at Labor Party headquarters, telling supporters she will run a strong and stable government until the result of the election is known.

She acknowledged the result was too close to call.

She paid tribute to Liberal leader Tony Abbott saying: "He has been a formidable advocate for his side of politics.... he is made of stern stuff."

She also used much of her speech to reach out to the four independent MPs elected tonight, the group now likely to hold the balance of power in a new minority government.

12.57am: Former Australian prime minister John Howard says Liberal leader Tony Abbott has "delivered an outcome beyond our wildest dreams just a few months ago", with the Coalition's performance in tonight's Australian Federal Election.

The two parties are virtually deadlocked with both unable to secure the 76 seats needed to become the government.

Mr Howard said the situation was almost "unprecedented", something the country hadn't seen since 1940.

Seventy-four per cent of the vote has now been counted.

12.43am: Herald reporter GREG ANSLEY - Australia will not know until tomorrow at the earliest - and possibly not until next week - who will govern the nation for the next three years.

It is now almost certain that there will be a hung parliament, with no clear indication of which party will win the greater number of seats to form a minority government.

Pre-poll and postal votes could be critical for the final count.

Whoever does finally form the Government will need to deal with four independents and the nation's first Green MP in the Lower House.

The three independents who were re-elected have conservative backgrounds but cannot be expected to automatically support the Coalition.

They have already agreed to meet in a "lockdown" - with an invitation for any other independents who might be elected - to discuss a common approach.

The new independent, Andrew Wilkie from Tasmania, has Green sympathies.

The new Government will also have to negotiate its legislation through a Senate in which the balance of power will be held by the Greens from next July, when its new Upper House members take their seats.

12.33am: Deputy Prime Minister Wayne Swan says it will take days of counting before it is clear who could form a government.

"It's very close. I think it's just too early to come to that conclusion," Swan told Australian Broadcasting Corporation television, referring to the possibility that his center-left Labor Party had lost the government.

If Labor end up losing the election, they would become the first government to be toppled after one term since 1931, when a Labor administration paid the ultimate price for the Great Depression.

Midnight: Senior Labor and coalition MPs believe a hung Parliament is the most likely outcome of the 2010 election.

Foreign Minister Stephen Smith told ABC TV Labor looked unlikely to win the 76 seats it needed to govern in its own right.

Liberal Nick Minchin, one of the coalition's most senior strategists, told ABC TV a hung parliament was likely.

Mr Smith said Labor was unlikely to make up the ground it needed in Western Australia to get to 76.

"We are going to have to do better in the West than the Westpoll today exhibited ... to be on 76," he said.

"There are a lot of variables in that."

The Westpoll published on Saturday morning picked Labor would be reduced to just three federal seats in WA from its current four.

It would be the first hung Parliament since World War 2.

11.34pm: Herald reporter GREG ANSLEY - The surprise prospect of four independents and one Green MP has swung the election against a Labor majority, with a hung parliament now more likely.

At 11.15pm, with 65 per cent of the vote counted, the ABC recorded a 3 per cent swing that saw the government and the Coalition running neck-and-neck, with results only starting to come in from Western Australia.

The addition of a Green MP in Melbourne and an independent in Tasmania with known Green leanings presents an even more complex prospect.

Whoever forms government under this scenario will have to deal with Green votes in the House of Representatives as well as what is likely to be a Senate in which the Greens hold the balance of power, giving the nation's third political force even greater leverage.

11.06pm: Sky News is predicting a strong possibility of a hung Parliament in tonight's Australian Federal election.

There has been a six per cent swing in votes away from Labor in NSW voting.

Despite the swing, Julia Gillard holds a slim majority in ABC news predictions.

But the prime minister's party needs 76 seats to win the election, a figure neither of the major parties seem able to reach.

Earlier this evening deposed former prime minister Kevin Rudd, who led Labor to victory three years ago, was returned by his constituents in the Queensland seat of Griffth.

10.42pm: Labor has retained all five Tasmanian lower house seats, according to the Australian Electoral Commission (AEC).

Labor received a 4.75 swing towards it, with 43.04 per cent of the votes counted, the AEC website said.

The website had Labor winning both Tasmanian marginal seats of Braddon and Bass, the latter which it held by only a one per cent margin.

But not such good news for Labor in the Sydney seat of Bennelong. The seat, long held by former Liberal prime minister John Howard, was claimed by Labour's Maxine McKew at the last election.

However that seat has returned to the Liberals this evening.
Bob Hawke told Sky News the swing against Ms McKew which was evident in early counting was a disappointment.

"Quite apart from the obvious partisan feeling ... I'm very personally disappointed for her because she was on such a high after her achievements ...so I feel very sorry for her because she's been a good member but there's no doubt that John Alexander ran a very strong campaign."

9.57pm: Herald reporter GREG ANSLEY - Early voting in the Australian election has begun to suggest that Prime Minister Julia Gillard's Labor Government might scrape back into power, despite dire opinion polls and predictions of a Coalition win or a hung parliament.

ABC computer predictions based on the count in the first hour-and-a-half after polling booths closed showed that while the Opposition had made significant inroads, the Government was holding a potentially winning edge.

The vote count at 7.45pm was 63 seats for Labor and 53 for the Coalition, with three independents.

Labor needs 76 seats to win a majority in the House of Representatives.













But with much of the vote yet to be counted and more than 30 seats yet to be called by computer predictions, Gillard's chances of becoming the nation's first elected prime minister remain in doubt.

Counting has also yet to begin in Western Australia, where polling booths have just closed, and where most analysts predict a large swing against the Government.

9.24pm: Australia's ABC news website is giving the early election lead to the Labor Party.

The ABC has made an early call on 101 of the 150 seats, giving Labor an early 52 seats to 46 advantage.

However, we say early because only 10.2 per cent of the vote has been counted.

To win the election, one party must secure 76 seats.

8.47pm: Bob Hawke, the former Labor prime minster and former Liberal leader John Hewson have told Sky News the election is too close to call.

Both former leaders said Tony Abbott had exceeded expectations with the campaign he had run.

"When Julia took over from Kevin (Rudd)...I hadn't given Tony a chance until then, and I thought from then on it was a contest," said Mr Hewson.

Mr Hawke had similar praise for the opposition leader.

"I certainly, and I think everyone else underestimated Tony's capacity to go through that campaign," said Mr Hawke.

"He did better than I expected and better than everyone else expected, and I give him credit for it."

8.04pm: Polls have just closed for the majority of the 14 million Australian voters registered to vote in the election.

But the Sydney Morning Herald reports almost 20 per cent of voters cast their ballot well in advance of election today.

The Australian Electoral Commission said today that 1.3 million people took advantage of early voting - 400,000 more than during the previous federal election in 2007.

A total of 950,000 people voted in advance by post.

With ballot booths closed in the eastern states, counting can now begin. We will bring the first results to you as they come to hand.

7.35: A Sky News exit poll shows Labor with the slimmest of leads, as polling in Australia's eastern states nears a close.

The poll shows Labor leading 51% to the Coalition's 49% on a two party preferred basis.

The poll, commissioned from Auspoll, was conducted in 30 key marginal seats.

6.30pm: As polling enters its final 90 minutes in the eastern states, Australia increasingly looks like voting in its first hung parliament in 70 years.

Counting begins after booths close in the east at 6pm (8pm NZ time), and as the night progresses officials will be including the early votes of about 1.8 million people, with postal votes still to come.

Polling closes in Western Australia two hours later.

With opinion polls split almost evenly between the two parties, the outcome will depend heavily on voting in marginal seats in Queensland and New South Wales, and the flow of preferences from the Greens to Labor.

A Morgan SMS poll of more than 1300 voters at 2pm today showed Labor's primary vote trailing the Coalition by seven points, but leading in the national two-party preferred vote by a narrow 51 per cent to 49 per cent.

This points to a hung parliament.

But odds at internet gaming agencies continued to favour Labor, with inconclusive results from today's Neilsen poll in Fairfax newspapers and Newspoll in the Australian.

The election is so close a result may not be known tonight.