Scenarios: Will Australia's Gillard win a second term?

CANBERRA (Reuters) - Australia's political stalemate moved closer to resolution on Thursday when a key independent threw his support behind Labor Prime Minister Julia Gillard to remain in power after inconclusive August 21 elections.

The decision by Tasmanian independent Andrew Wilkie gives Gillard's Labor Party control of 74 seats in the 150-seat parliament, compared to 73 for opposition leader Tony Abbott's conservative coalition.

Gillard and Abbott need 76 votes to control parliament and form government, and the election outcome now hangs on support from three rural independent lawmakers.

Here are some possible outcomes:

GILLARD FORMS GOVERNMENT

PROBABILITY: More likely, chances improving

Gillard has now won parliamentary support from the sole Green MP and Tasmanian independent Andrew Wilkie, strengthening her chances of securing the 76 votes she needs to hold power. She now has a strong chance of forging a deal with two of the remaining independents, Tony Windsor and Rob Oakeshott. Both favor Labor policies on broadband and climate, and both have given broad support for the government's proposed mining tax, although they may seek refinements.

The third rural independent, Bob Katter, is unpredictable, but unlikely to back Gillard's Labor. He opposes the mining tax and any move to put a price on carbon pollution. He would be more likely to side with the conservative opposition.

The independents all say they want a stable government for the coming three years. The numbers now suggest Gillard is best placed to offer that, as she could control 77 seats if the remaining three independents back Labor. Gillard's agreement with the Greens also offers more stability long term, with the Greens to control Senate balance of power from July 2011.

ABBOTT FORMS GOVERNMENT WITH INDEPENDENTS

PROBABILITY: Still possible, but less likely

Abbott's chances of forming the new government have diminished, but only slightly. To win, he now needs all three rural independents to back his side of politics. The best result he can hope for now is to control 76 seats. But his campaign has also been damaged by Treasury analysis of his election promises, which has found a $9.6 billion hole in his manifesto plans.

The rural independents would normally be natural allies for Abbott. But two support more of Gillard's policies. The independents might also want to strongly assert their independence by siding with Labor, based on the delivery of services to their constituencies.

POLITICAL DEADLOCK, NEW ELECTION NEEDED

PROBABILITY: Possible, but less likely in the short term

The independents all want a stable government for the next three years, and the winning side would want to avoid an early election. However, the losing side will exert maximum political pressure on the new government, which could be forced to a new election by mid-2011 to seek a stronger mandate. The complex negotiations ahead on each new legislative bill could also lead to political logjams, which would also point to the need for an early election.

(Editing by Sugita Katyal)