Election result (seats)

13 - Labour 10 - County Liberal 2 - Independents

She was speaking during a private meeting with Aboriginal elders at the Garma festival in north-east Arnhemland.

In her address to the elders, Claire Martin tackled the issues which have alienated the Aboriginal community over the past two-and-a-half decades.

Mandatory sentencing

She promised an inclusive government for all and committed herself to repealing the mandatory sentencing regime that automatically jails people for property crime.

Australia celebrated its Aboriginal heritage at the Sydney Olympics

Aboriginal leaders say that since the law was put in place four years ago, the imprisonment rate of indigenous women has gone up by 200%, and people have been jailed for crimes as small as stealing a biscuit.

Ms Martin also pledged that her government would deal with land rights and native title claims in a completely different way.

Aboriginal leaders say that Ms Martin's meeting with them, on the very day that she will be invited to form government, is hugely significant, and that it could herald the start of a deeper reconciliation process.

A federal election is expected before the end of the year, and a Labour win in what had been a staunchly conservative area, is being seen as a warning to the coalition government of Prime Minister John Howard.