It is now clear that a majority in parliament wants a new government

Outgoing leader Jens Stoltenberg

Labour's Jens Stoltenberg led the party to its worst election result in 90 years when the country went to the polls in September.

No single party secured enough votes to form a majority government, leaving a month-long scramble to build a coalition.

Tax concerns

Three parties - the Conservatives, the Christian People's Party and the Liberals - have now succeeded in building an alliance which will share power, with the backing of the far-right Progress Party.

The three coalition members have a total of 62 of the 165 seats in parliament.

Bondevik: Promises programme of tax cuts

Backing from the Progress Party's 26 members will take their total parliamentary strength to 88, just five seats above the total needed for a majority.

Mr Bondevik, a Lutheran clergyman, confirmed he would lead the new government and told reporters he felt "humbled because I know that this is a very demanding job; confidence because I have a task and feel that I have a platform to stand on".

Announcing his resignation, Prime Minister Stoltenberg said: "It is now clear that a majority in parliament wants a new government".

Tax anger

Voters are thought to have rejected Labour because they were unhappy at high taxes coupled with problems in public services.

The new government is expected to embark on a big programme of tax cuts.

The leader of the Progress Party, Carl Hagen, said he had decided to back the coalition because its overall policies would be closest to his those of his own party.

The party has an anti-immigration stance, as well as campaigning for lower taxes.