CANBERRA (Reuters) - Australia's Greens party said Wednesday it would back a minority Labour government, giving a not-unexpected boost to Prime Minister Julia Gillard as she vies with the opposition to win over enough lawmakers to rule.
However, the race to secure an outright majority may still have several days to run, with four independent lawmakers now holding the balance of power following the inconclusive elections on August 21.
If Labour forms government, the deal with the Greens would commit it to tackling climate change, holding a parliamentary debate on the war in Afghanistan and consulting the Greens on economic and budget issues.
"Our agreement is to the stable, open and good governance of this country," Greens leader Bob Brown told a news conference.
The independent lawmakers now hold the key to power, but may take another few days or so to decide whether to support Labour or the conservative opposition coalition led by Tony Abbott.
"I think it might be a bit optimistic to say this week, but I would be very surprised if it went beyond Monday or Tuesday," rural-based independent Bob Katter told Australian television.
Another independent, Andrew Wilkie, said he was undecided on who to back after earlier giving himself a Wednesday deadline for making his mind up on who would meet a long list of demands.
"The reality is that it is going more slowly than I had hoped," Wilkie said.
Bookmakers are tipping a win for the conservative coalition, which has promised to scrap a proposed mining profits tax and carbon-trading plans, and a $38 billion broadband project that could hurt dominant telecoms provider Telstra.
Election-count projections point to the conservatives ending up with 73 seats and Labour 72. With the Green lawmaker, Adam Bandt, Labour is now level with the opposition, but 76 seats are needed to command a working majority in the 150-seat lower house.
The Greens' support, although fully expected, did not come without a price. The party said it would ensure budget funding and support Labour in the event of a parliamentary no-confidence motion in the government. However, its support was also conditional on a referendum on constitutional recognition of indigenous people.
Australia's struggle to forge a government has failed to unsettle financial markets: the Australian dollar is almost unchanged from its pre-election level and stocks have lost only 0.5 percent since the vote.
Investors are mostly worried that an economic slowdown in the United States and Japan could spill over into Australia.
(Reporting by Rob Taylor; Editing by John Chalmers and Mark Bendeich)
