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SYDNEY (Reuters) - Australia was headed for a hung parliament or a minority government with more than half the votes counted in a national poll on Saturday, potentially blocking Prime Minister Malcolm Turnbull's ability to enact key economic reforms.
Official electoral data for the House of Representatives showed a 3.2 percent swing away from the Liberal-led coalition government as officials clocked off for the evening with almost 10 million votes counted.
The tight vote is a major blow for Turnbull whose gamble on a risky double dissolution of parliament in a bid to oust intransigent independents in the upper house Senate blocking his agenda appears to have backfired.
"Friends, we will not know the outcome of this election tonight, indeed, we may not know it for some days to come," a jubilant Bill Shorten, leader of the opposition Labor Party, told supporters in Melbourne just before midnight. "But there is one thing for sure - the Labor Party is back."
Opinion polls heading into Saturday's vote had showed a potentially tight vote after the landslide victory that brought the coalition to power in 2013; but just how tight still caught many by surprise.
Former prime minister Tony Abbott told Liberal Party followers it was a "difficult night" after he successfully retained his Sydney seat.
On official projections issued as counting was wound up early Sunday morning, the coalition was expected to hold 68 seats, against the opposition Labor Party's 70 seats and five to independents and the Greens Party. A further seven seats were in the balance.
With just six seats left to be determined in the House of Representatives, it was unclear if the coalition would win enough to form a government without an alliance with small parties and independents to get a majority.
"It is a very, very close count," Turnbull told the party faithful at coalition headquarters in Sydney after Shorten spoke. "I can report that based on the advice I have from the party officials, we can have every confidence that we will form a coalition majority government in the next parliament."
Still, there were early rumblings about Turnbull's future given the closeness of the vote. Turnbull had some of the highest poll ratings of an Australian leader on record shortly after he snatched the top job from Abbott last year. But that popularity soured as he appeared to bend his center-right values on issues like climate change and same sex marriage to the right-wing powerbrokers in his party.
The vote in the 76-seat Senate was also looking troublesome for the coalition with the independent centrist Nick Xenophon Team on track to win several seats. Pauline Hanson's One Nation party is also on track to win several Senate positions, bringing the Far Right politician back into parliament after an almost 20-year absence.
"I believe that we need maturity in the parliament to start passing legislation that is right for the people and our future generations," said Hanson, who campaigned on an anti-immigration, anti-Muslim platform.
Turnbull had said a vote for the coalition was a vote for political stability, invoking the global economic and political fallout from Britain's decision to leave the European Union.
Minor parties, possibly in a coalition with center-left Labor, he argued, could not be trusted to manage an economy hampered by a mining downturn and balance public finances after years of deficits.
Xenophon, whose party won its first lower house seat, has vowed to block the coalition's cornerstone A$50 billion ($37 billion) corporate tax cuts if his party holds the balance of power in the Senate.
"We've broken the duopoly," Xenophon said to cheers from supporters at a campaign event in Adelaide. "There's only been one of me in 226 seats; there'll be at least four of us and that'll be huge."
There is no counting scheduled for Sunday, with counting for the Senate to resume on Monday and the House of Representatives on Tuesday.
(Story refiles to remove extraneous words in paragraph seven.)
Additional reporting by Colin Packham and Tom Westbrook in SYDNEY, Melanie Burton in MELBOURNE and Matt Siegel in ADELAIDE; Editing by Nick Macfie, Susan Thomas and Mark Potter