While the West Australian state poll put the first crack in Labor's domination of all nine Australian governments, the Coalition did not fare well in two federal by-elections, losing one to an Independent and suffering an 11per cent swing in the other.

WA Nationals leader Brendon Grylls has assumed the role of kingmaker as the major parties await the outcome of undecided seats in the state election.

The Nationals, who are likely to hold the balance of power with at least four seats in the Legislative Assembly, were courted yesterday by both Premier Alan Carpenter and Opposition Leader Colin Barnett.

Mr Carpenter said he was hopeful of reaching an agreement to govern with the Nationals after he held talks with Mr Grylls at Parliament House.

But Mr Barnett, who was scheduled to speak to Mr Grylls this morning, said National voters would want their leader to support a Liberal government.

''I believe both National party voters and Liberal Party voters want to see a new government and want to see a Liberal-National arrangement of some sort,'' Mr Barnett said in his Cottesloe electorate yesterday.

Prime Minister Kevin Rudd said last night he looked forward to working with whoever managed to form government.

Federal Treasurer Wayne Swan seized on the Liberals' poor showing in the by-election for the Adelaide hinterland seat of Mayo, formerly held by long-serving foreign minister Alexander Downer, to target Dr Nelson. Labor did not field a candidate and the Greens' Lynton Vonow came with two percentage points of upsetting Liberal Jamie Briggs.

''If Brendan Nelson has got to struggle in Mayo, then I think his Liberal leadership is in deep trouble,'' Mr Swan said.

Dr Nelson said the Melbourne Cup field had made it hard for Mr Briggs and distanced the anti-Liberal swing from any federal factors.

''We had 11 candidates, no Labor candidate, which meant the issues were essentially local ones,'' he said. ''We didn't receive preferences from anybody, we had a high-profile disaffected Liberal, Bob Day, well cashed up, who went to Family First and the Family First vote went from 4-11per cent in the space of nine months.''

The Coalition lost the federal seat of Lyne, contested on Saturday, with popular state Independent MP Rob Oakeshott easily defeating the Nationals' Rob Drew, and taking the seat out of Nationals' (or Country Party) hands for the first time in its 59-year history.

The federal Nationals leader, Warren Truss, countenanced the option of merging with the Liberals in the wake of the Lyne defeat. And while the West Australian result puts further pressure on the conservative parties to merge, Independent federal MP Tony Windsor, who was previously an Independent state MP for a decade, urged the Nationals to sit on the cross-benches in the West.

''If they don't, the WA Nationals will run the risk of being taken for granted by both the Liberal and the Labor parties,'' he said. ''You don't have to be part of a government to allow a government to form, as instanced with the Greiner government in 1991 when my vote allowed the government to form, but I didn't have to join it.

''That maintains the maximum leverage for country people.'' Mr Truss said, ''all of the options are on the table''.

''We will certainly be looking at mergers, but we will also be looking at the options of being more separate and doing the things we do now better,'' he told the ABC.

''We have just had a marvellous result in Western Australia, where a different approach has been taken, so we have to look very seriously at that.''

The WA Nationals have picked up a fourth seat, putting them in line to form a coalition government with the Liberals.

The Greens federal leader, Bob Brown, hailed his party's strong showing at the weekend, saying its near-win in Mayo and its 4 per cent swing in WA ''spell disintegration for the two-party system in Australia''.

Source: The Canberra Times