With Mr Wilkie formally backing Labor, Ms Gillard is closer to forming a minority federal government. Opposition Leader Tony Abbott needs the support of all three rural Independents – Bob Katter, Tony Windsor and Rob Oakeshott – whereas Ms Gillard only needs the backing of two.

The trio will issue their ideas on parliamentary reform today before taking the weekend to decide whether Labor or the Coalition will form government. They will reveal their stance early next week.

Mr Wilkie guessed ‘‘one or two – maybe three’’ of them would now side with Labor.

The Denison MP secured $100 million and possibly more to rebuild the Royal Hobart Hospital, along with a commitment to force the states to introduce a uniform smart card system on poker machines if they wouldn’t volunteer.

He revealed yesterday he had rejected an extraordinarily generous, but bordering on reckless, offer – including $1 billion to build a new hospital in Hobart – from Mr Abbott and decided to side with Ms Gillard. It came a day after Ms Gillard won support from the Greens to form a minority Labor government. In exchange for Mr Wilkie’s backing, she pledged $100 million to build a women’s and children’s hospital in Hobart and to call for a new round of applications for federal funding for major hospital projects.

Mr Wilkie said the Royal Hobart Hospital was in line for up to $340 million from the $1.8 billion Health and Hospitals Fund.

‘‘I think this is an example of where seeking a more modest amount but being more conscious of proper process, and more conscious of equity, so that hospitals around the country can benefit from $1.8 billion, is a much more ethical way to go than simply just grabbing a $1 billion for Tasmania,’’ he said.

Late last night, Coalition finance spokesman Andrew Robb said the $1 billion offer for the Hobart hospital was still on the table for the state.

Mr Wilkie’s agreement included a commitment for more protection for whistleblowers and a pledge to tackle problem gambling by imposing a $250 cap on withdrawals from ATMs in gaming venues excluding casinos, and smart cards to limit bets on poker machines.

For more on this story, including Prime Minister Julia Gillard’s comments on the agreement with Mr Wilkie, see the print edition of today’s Canberra Times.