Australian Prime Minister John Howard and his ruling coalition party was last night voted out of Government, with the Labor Party claiming victory in the country's national election.

Late last night, Howard was struggling to hold even his own seat.

The vote ended 11 years of conservative government led by Howard - and heralded the arrival of new prime minister Kevin Rudd.

"On the numbers we are seeing tonight, Labor is going to form a government," Labor's deputy leader, Julia Gillard, told Australian television.

Australian Broadcasting Corp television predicted on early counting that Labor, led by Rudd, would win at least 83 seats in the 150-seat parliament, giving it a clear majority.

Key commentators, including former prime minister Bob Hawke, also declared Labor was back in power. "I think Labor's won," Hawke told Sky News. "It's a question by how much."

Howard was struggling to keep his own parliamentary seat in Sydney. If Howard loses his seat he would be the first sitting Australian prime minister since 1929 to be dumped by voters.

Finance Minister Nick Minchin refused to accept a Labor victory, saying: "I don't think there is enough to concede defeat".

But Howard's communications minister, Helen Coonan, said: "If this trend continues we have to accept the voters think that it's time for the prime minister to go."

Howard, 68, has trailed in opinion polls all year. A staunch US ally committed to keeping Australian troops in Iraq, he offered voters A$34 billion ($39.08b) in tax cuts, but few new policies. Rudd has pledged to withdraw combat troops from Iraq and sign the Kyoto Protocol, further isolating Washington. The Mandarin-speaking former diplomat would also be expected to forge closer ties with China and other Asian nations.

Rudd, 50, has offered voters a generational change, saying Howard is too old and tired to lead Australia.

Howard has criticised Rudd's lack of experience, insisting a Labour government would be dominated by former trade unionists and would wreck an economy which has recorded 17 years of growth. Howard once described himself as "Lazarus with a triple bypass" for his ability to be resurrected from political defeat.

New Zealand Prime Minister Helen Clark today congratulated Kevin Rudd on his victory.

Helen Clark said she looked forward to working closely with Mr Rudd and his government.

"The relationship between Australia and New Zealand is of considerable significance to both countries. I anticipate that our close and familiar relationship will continue to flourish under Mr Rudd and his new Labor Government," she said.

"Our many areas of co-operation with Australia include developing a single economic market, climate change, strengthening institutions in the South Pacific, improving international trade rules, and making the world a safer place through peacekeeping and promoting inter-faith dialogue."

Helen Clark also paid tribute to outgoing Australian prime minister John Howard: "Mr Howard has been a good friend to New Zealand, and his legacy includes a substantial deepening in the trans-Tasman relationship," she said.

Helen Clark spoke from Uganda where she is attending the Commonwealth Heads of Government Meeting.

- AGENCIES