UPDATE 6-Canada's Conservatives win stronger minority

(Updates with more results and and reaction)

By Randall Palmer and David Ljunggren

OTTAWA, Oct 14 (Reuters) - Canadian Prime Minister Stephen Harper, the first Western leader to face the electorate since the financial meltdown, won re-election with a significantly stronger minority government on Tuesday.

The Conservatives, who convinced voters they were the best choice to steer Canada through the economic turmoil, will still need opposition support to govern.

It will be Canada's third minority government in four years. Harper's Conservatives defeated a Liberal minority government in the January 2006 election.

Initial results showed the Conservatives got 37 percent of the popular vote, just a fraction above the 36.3 percent they got in 2006. Vote-splitting on the left meant the party ended up in a much stronger position.

Initial television projections put the Conservatives at 144 of Parliament's 308 seats, up from the 127 they held before the election but short of the 155 needed for a majority.

The opposition Liberals were at 74. The separatist Bloc Quebecois were up two to 50 seats, the leftist New Democrats were up eight to 38 seats. Independents took two seats and the Greens had none.

"We were expecting a minority government. It looks like it will be a strengthened one. We're going to get right back to work -- that's what people expect us to do," Health Minister Tony Clement told Global Television.

Harper became only the second Canadian prime minister, after Liberal Lester Pearson in the 1960s, to win a second consecutive minority government.

The Liberals, who have historically governed Canada for longer than any other party, looked set for their worst performance since 1984. The rout could trigger an internal battle to replace leader Stephane Dion.

The Conservative leader ran on a modest platform of keeping taxes and spending under control. The Liberals proposed introducing a carbon tax while cutting income taxes and boosting social spending, and Harper said the Liberal plan would throw Canada into recession.

Dion, a bookish francophone who sometimes makes mistakes in English, found it a hard sell at a time of relatively high energy prices to pitch his carbon tax plan.

"I think my party failed to deliver a real cogent response to the economic and financial crisis," said defeated Liberal legislator Garth Turner.

Dion started to cut into Harper's lead during the campaign as he charged the prime minister, a former economist who is also fairly wooden, was not doing enough to prevent financial contagion from spreading into Canada.

But the Conservative lead over the Liberals widened again in parallel with specific action taken to improve Canadian bank liquidity. Harper had the added benefit that markets and the Canadian dollar rebounded on Election Day.