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Credit: Reuters/Daniel Munoz By Morag MacKinnon PERTH | Sun Mar 25, 2012 1:55am EDT PERTH (Reuters) - Australia's ruling Labor Party has suffered a crushing defeat in an election in the state of Queensland, handing the conservative Liberal National coalition the biggest majority in the state's history. While having no direct impact on federal politics, the result is likely to be a worry for Prime Minister Julia Gillard and her Labor Party who hold a knife-edge, one-seat majority in the federal parliament with the backing of the Greens and two independents. With about 70 percent of the vote from Saturday's poll counted, the Liberal National Party (LNP), led by former Brisbane Lord Mayor Campbell Newman, has won 78 of the state's 89 parliamentary seats while the Labor government led by Premier Anna Bligh has seen its representation slashed from 51 to 7. Bligh accepted responsibility for the defeat and despite winning her own seat of South Brisbane, announced her resignation from politics. That triggers an immediate by-election, further threatening Labor's weak showing in the state. "This result is absolutely shattering for the Australian Labor Party," Bligh said. "This is much more than a loss, it is without doubt a devastating defeat." Labor has ruled in Queensland for 20 of the past 22 years. While political analysts say the Queensland election was fought and won on state issues, Labor now only holds power in two of the nation's six states. Queensland is the home state of former Prime Minister Kevin Rudd and Treasurer Wayne Swan, who holds his seat of Lilley by a 3.2 percent margin. The Labor party lost seven seats in Queensland in the last federal election in 2010. Newman, 48, thanked the Queensland public for "voting for change". "We're all humbled by the responsibility that you have given us. A responsibility that actually weighs heavily but it is cheerfully accepted," Newman said. Bligh, 51, was widely praised for her handling of the devastating effects of Cyclone Yasi and the floods of 2010-2011. She is a descendant of Captain William Bligh, who survived the infamous mutiny on HMS Bounty in 1789 and later returned to Australia as a governor of the New South Wales colony. (Editing by Robert Birsel) World Australia Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. 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