Prime minister Julia Gillard said today no major party had won a majority of parliamentary seats in Australia's general election and she had started negotiating with independent MPs in an effort to cling to power.

Ms Gillard said she was hoping to enlist support for her centre-left Labour Party and had held preliminary talks with three independents in the House of Representatives, an independent candidate whose seat is not yet assured and an MP from the Greens party.

Both Labour, which has ruled for the past three years, and the conservative Liberal Party-led coalition opposition have conceded that neither is likely to claim the 76 seats needed to form a government in the 150-seat House of Representatives.

"It is clear that neither party has earned the right to government in its own right," Ms Gillard said. "It's my intention to negotiate in good faith an effective agreement to form government."

An Australian government has not had to rely on the support of independent lawmakers to rule since 1942.

The election results were expected to be the closest since 1961, when a Liberal government retained power with a single seat.

With 78% of the vote counted, the Australian Electoral Commission said Labour had won 70 seats - one less than earlier calculated - and the coalition 71. Most analysts agree that the coalition was likely to finish with 73 - a single seat advantage over Labour.

Analyst Norman Abjorensen, an Australian National University political scientist, said the most likely outcome would be an unstable minority government under Liberal leader Tony Abbott and supported by three independents.

Mr Abbott argues that he deserves to lead because his coalition attracted more votes than Labour.

Mr Abbott said the loss of voter support for Labor that cost the government so many of its 83 seats showed that Australians wanted the government to change.

While he did not rule out winning the election, he confirmed that he also had preliminary discussions with the independents and Greens.

"It is historically unprecedented for a first-term government to receive the kind of rebuff that the ... government received yesterday," Mr Abbott said.

"It's certain that any Labour government emerging from yesterday will be chronically divided and dysfunctional," he added.

Independent Tony Windsor said he planned to talk with fellow independents Bob Katter and Rob Oakeshott today to decide on issues including whether to negotiate a power deal with the major parties as a group or individually.

All three were the only independents in the last parliament and all are former members of the Nationals party, which is a coalition partner of the Liberals. But all have said they are open to the prospect of supporting a Labour minority government.

"Whichever side it is, we need to have some stability and maintenance of stability so that the government can actually work," Mr Windsor told Australian Broadcasting Corp. television.

"We might end up back at the polls," he added, referring to the possibility of another election if a support pact cannot be negotiated.

All three independents have made a key issue of boosting the poor telecommunications services in rural Australia.

Labour had gone to the polls promising a high-speed optical fibre national broadband network. The Liberals had promised a smaller, slower network using a range of technologies including optical fiber, wireless and DSL.

Greens party leader Bob Brown said no agreement had been reached after a "cordial" conversation with Ms Gillard, who was seeking the support of newly elected Greens lawmaker Adam Brandt. But Mr Brandt had previously stated his preference for a Labour government.

The Greens won a surge of support from former Labour voters after Labour shelved plans to charge major polluting industries for every ton of carbon gas that they emit in a bid to curb Australia's greenhouse gas emissions. The record support for the Greens has increased the party's senate seats from five to nine, giving them the leverage to become kingmaker in deciding which major party controls that chamber.

Mr Abbott doubts the science behind climate change and rules out ever taxing polluters for their greenhouse gas emissions.

A former Greens member Andrew Wilkie, the independent candidate contacted by Ms Gillard, said he would not talk about which party he might support until his own seat was certain.

An Australian government has not had to rely on the support of independent lawmakers to rule since 1943. Two independents had changed the government in the preceding three-year term by switching their allegiance from the conservatives to Labour.

The final election results might not be known for a week.