AUSTRALIA...Julia Gillard, Prime Minister: Independents back Labor ...

JULIA Gillard has survived the scare of a lifetime to remain as prime minister.

NSW Independent MPs Rob Oakeshott and Tony Windsor have announced they will back Labor in minority government, after Bob Katter (QLD) announced earlier - and alone - that he would go with the Coalition. That gives Ms Gillard a one-seat majority in the parliament, 76 votes to 74.

Ms Gillard says Labor "is prepared to govern" for the next three years. "We will govern in the best interests of the Australian people. If we fail ... we will be judged harshly."

Ms Gillard has said the election result had delivered an opportunity for a more accountable government with a better deal for the bush. "Let's let the sun shine in," she has said.

In a message to Tony Abbott and the Coalition, she has said: "I believe the Australian people want us to find more common ground. I extend my hand to work with you in good faith". Mr Abbott had phoned her to wish her well.

Mr Abbott is scheduled to make an appearance after the prime minister-elect. Ms Gillard is then expected to head straight to the Governor-General to advise her that she can form the next government.

The next step will be to announce the next Labor ministry. There will have to be a high profile role for Kevin Rudd - possibly foreign affairs - while a new finance minister and defence minister will have to be named.

Ms Gillard has confirmed she has offered Mr Oakeshott a ministry position.

Independents support

Mr Windsor has said the two Independents' decision was only made at about 1:30pm AEST today, after 17 days of negotiations. "I can live with it," he has said of his decision. Mr Oakeshott has said he is going against his usual political beliefs for the good of the country.

Mr Windsor later said he has favoured Labor because he thought Mr Abbott would want to rush back to the polls "because I think he would win". "They (Labor) are more likely to be here for a longer period of time if they can't go back to the polls in a hurry. They've got more to lose."

Mr Windsor has ruled out taking on a ministry in a Gillard government or being speaker in the next parliament.

Mr Oakeshott has said Labor should not feel too empowered after all that has gone on. "This is not a mandate for any government," he has said, adding that the election result showed an overwhelming rejection of the major parties.

He has said it was "line-ball, six of one, half a dozen of the other" in making his decision and that the job ahead of both sides of politics now is to "bring Australia together". "If we can have a country that is as much as possible unified on the back of this decision, then that is a good job done."

Both men have praised the Labor and Coalition teams for how they engaged in negotiations, and have said either leader would have been a good prime minister.

Mr Katter has said the removal of Mr Rudd as prime minister was a key factor in his decision and "it would have been a different outcome" in Mr Rudd was still Labor leader.

"I was extremely angry and so was my state" when Mr Rudd was ousted, he has said, although he has also said he likes Ms Gillard and Wayne Swan and would have no problem working with them.

"I like Julia Gillard and Wayne Swan, you know, I've been lavish in my praise for him, so I would have no difficulty in working with their government whatsoever," he has said.

It is unclear if that means Mr Katter would back a confidence motion in Labor if Ms Gillard emerges with a workable majority. But he has insisted he will act as an Independent above all else in the next parliament.