Australia's first woman Prime Minister Julia Gillard edged ahead in early counting for a knife-edge national election on Saturday which could see her ousted after only two months.
With 24 percent of votes counted, Gillard's Labor party held 63 seats against 50 for Tony Abbott's Liberal/National coalition, public broadcaster ABC said, in a race tipped to be the closest in decades.
"It will be very, very close," Shadow Treasurer Joe Hockey told ABC as results continued to trickle in. "If I was a betting man I'd say the most likely result is some sort of hung parliament but I'm not a betting man."
The Australian Electoral Commission's tally, which lagged behind the state broadcaster, put the government ahead 54 seats to 48 with nearly 19 percent of the vote counted.
Early results showed heavy swings against Labor in the battleground states of Queensland and New South Wales, but stronger support for the Greens, which favours the ruling party under Australia's complex preferences system.
Gillard, Australia's first woman prime minister, ran a campaign riddled with problems and overshadowed by anger over her shock ousting of elected leader Kevin Rudd in June, with the backing of factional chiefs.
"This is a tough, tight, close contest, but I'm exercising my own vote," Gillard said earlier as she cast her ballot in Melbourne.
Around 14 million electors took part in a mandatory vote for the 150-seat lower house and half of the Senate, with experts and politicians saying the outcome was too close to call.
Two separate television exit polls conducted before polling closed predicted Gillard's party would win by 51 or 52 percent of the vote to the coalition's 48 or 49, but indicated dangerous swings against Labor in key marginal seats.
Gillard, 48, a red-headed former lawyer who was born in Wales, has pledged better education and healthcare and played up Labor's role in helping Australia shrug off the financial crisis, as well as a planned national broadband scheme.
Abbott, a 52-year-old religious conservative who has doubts about mankind's role in climate change, has targeted fears over illegal immigration and questioned Labor's spending record, as well as Gillard's knifing of Rudd.
"This is a big day for our country," Liberal/National coalition leader Abbott said as he cast his vote in Sydney. "It's a day when we can vote out a bad government."
The right-leaning coalition needs a uniform swing of 2.3 percent to return to power less than three years after Rudd ousted 11.5-year prime minister John Howard, pledging action on climate change and impoverished Aborigines.
Victory for Abbott would make Labor the first one-term government since 1932, when the party's James Scullin lost power during turmoil caused by the Great Depression.
Such a defeat would be an ironic end to a government that won international praise for its handling of the global financial crisis, from which Australia emerged stronger than any other Western economy.
Both sides are targeting marginal seats in resource-rich Queensland -- Rudd's home state -- and western Sydney, where rapid population growth has put pressure on services and raised concerns about immigration.
Newspapers are split between Gillard and Abbott, but commentators agreed Labor had bungled by replacing Rudd just ahead of polls and underestimating the opposition leader, who has tempered his image as a colourful maverick.
But Labor's tenure could be saved by Australia's complex proportional representation electoral system that allows voters to pick their party and also list their second and subsequent choices in order of preference.
If voters disillusioned with Labor trump for the Greens, as many analysts expect, but preference Labor, those votes may be redistributed to the ruling party under a deal between the parties, possibly nudging it over the line.
Most polls closed at 6:00 pm (0800 GMT) Sydney time with the remainder two hours later due to time differences. The elections will decide the make-up of the 150-seat lower house and half the 76-seat Senate.
But analysts raised the prospect of no result being announced Saturday, saying the contest was so close that postal votes may have to be counted.