Julia Gillard to retain power in Australia

Sydney: Australia's incumbent Prime Minister Julia Gillard, who on Tuesday won the support of two independent MPs to reach the half-way mark in Parliament, is all set to form a minority government that will end a 17-day political impasse in the country.

The independents' support gives Gillard, the country's first woman prime minister, the narrowest of margins in the 150-member House of Representatives, bringing to 76 the number of MPs willing to support Labor. The opposition Coalition led by Tony Abbott has 73 seats.

The two independents, Rob Oakeshott and Tony Windsor, announced their decisions to back Julia Gillard as prime minister, the Sydney Morning Herald reported.

But Oakeshott warned: "This is not a mandate for any government. This parliament is going to be different."

The decision came after 17 days of protracted negotiations between the independents and the two leaders - Abbott and Gillard.

Gillard will hold a press conference later in the day.

Independent Tony Windsor said both sides had offered generous packages to support health, education and infrastructure for regional communities. He said providing stability for the country had been another key factor in his decision.

"If a government is formed, how long could it last and that is a key deliberation in our view," Wndsor said.

Oakeshott said the independents had secured a deal with the Labor to promote regional development and to hold a tax reform summit.

The Labor's position on broadband and climate change had also been important factors in his decision.

Earlier, Queensland independent MP Bob Katter called a press conference to declare his hand before his two independent colleagues, both from New South Wales.

Katter announced he was backing the Coalition to form a minority government, and indicated his decision would have been different had Kevin Rudd still been the Labor leader. Rudd was ousted in an internal Labour coup by Gillard a few weeks back.

All the three independent MPs met Gillard and Abbott Tuesday morning before they announced their decision.

The independents had also held out until both parties agreed to a major reforms to the parliament.

The August 21 election had produced Australia's first hung Parliament in 70 years.