Australia's long-serving conservative government not only lost yesterday's Australian election but its leader, John Howard, became only the second Prime Minister in Australia's history to lose his seat in Parliament.

The Australian Labor Party, out of power nationally since 1996, stormed back into government, winning at least 20 more seats in Australia's 150-seat House of Representatives. The Labor leader, Kevin Rudd, 50, needed only 16 extra seats to form Government.

Mr Rudd, a former diplomat and China specialist, will have Australia's first female deputy Prime Minister at his side - Julia Gillard, a former lawyer.

There were wild scenes at the national election tally room in Australia's capital, Canberra, last night as hundreds of people queued for entry to witness a historic change of government after nearly 12 years of conservative rule by Mr Howard's Liberal-National Coalition.

Only once before since the beginning of the Australian federation in 1901 has a sitting Prime Minister been thrown out of his seat at a general election. Prime Minister Stanley Bruce lost his seat in the 1929 election after becoming deeply unpopular for attempting to erode the rights of workers.

Members of Mr Howard's own Government conceded last night that 68-year-old Howard's controversial Work Choices laws, which also curtailed workers' rights, were a major factor in his loss of Government and of his Parliamentary seat of Bennelong in suburban Sydney which he held for 33 years.

Australia's long-serving former Labor Prime Minister, Bob Hawke, who left office in 1993, told the Australian Broadcasting Corporation's (ABC) television election panel that it was ironic that Mr Howard's long political career had ended with the loss of his seat in Parliament.

He said that like Bruce, Mr Howard had been voted out because he had reduced workers' rights.

"It's a delicious irony and repetition of history," Mr Hawke told ABC television's election night panel.

Mr Howard conceded the defeat of his government shortly before 11pm last night, saying he accepted full responsibility for the defeat and he wished the Labor leader, Mr Rudd, well.

Mr Howard said the Labor Party had won an emphatic victory.

"I have bequeathed to him [Mr Rudd] a nation that is stronger, prouder and more prosperous than it was 11½ ago," Mr Howard said.

Mr Howard made clear that he believed his Treasurer, Mr Peter Costello, should succeed him as leader of the Australian Liberal Party. Mr Howard had previously said that if he won the election he would have handed over to Mr Costello in the middle of his term.

Mr Rudd appeared at his Brisbane campaign headquarters shortly after 11pm to rowdy scenes of welcome.

His first public words as Prime Minister were: "OK, guys."

He said: " Australia has looked to the future. The Australian people have decided that we as a nation will move forward."

He said he wished to put aside what he called old battles between employers and unions and developers and environmentalists.

"The great Australian 'fair go' has a future and not a past," said Mr Rudd.

Mr Rudd won his loudest applause when he paid tribute to a dying worker, Mr Bernie Banton, suffering from workplace- induced cancer. He said Mr Banton, engaged in a deathbed battle for compensation from his employer, was a beacon for Australian trade unionism and workers.

A former television presenter, Maxine McKew, stood for the Labor Party and appeared to have defeated Mr Howard in his Sydney suburban seat of Bennelong.

A jubilant Ms McKew, told her supporters last night: "This has been an amazing night - a wonderful night for the Labor Party. A fabulous - I hope - transforming moment for the country."

Nick Michin, the Finance Minister in the Horward Government and a close confidant of Mr Howard, said on ABC TV last night: "The industrial relations reforms may well have cost us this election."

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