Gallagher returned as Chief Minister as Rattenbury chooses Labor

Mr Rattenbury has been in negotiations with both ACT Labor and the Canberra Liberals this week after the October 20 election left each party with eight seats, leaving the Greens MLA in the middle as the territory's kingmaker.

He said his decision today was based on key policies including light rail, climate change and greenhouse gas reduction targets, marriage equality, and the health of the ACT waterways.

His agreement with Labor covered about 100 items, and included a ministry and a seat in the Labor cabinet.

"In the end, I felt that the ALP put a more substantial policy response on the table," Mr Rattenbury said at the press conference today.

I believe it is time, after 17 years of the ACT Greens being represented in the LA and on the cross bench, for the ACT Greens to play a role in the government."

Negotiations 'came down to policy'

Mr Rattenbury said a commitment to light rail was a key part of the agreement he will sign with Labor.

"This is a project the Greens are fundamentally committed to. It will help transform this city," he said.

"That is the good news for Canberra. Light rail will come to Canberra as part of this agreement.

"I expect that Canberrans will begin to see work begin in 2015."

Mr Rattenbury also pointed to an $85 million program to improve the health of Canberra's lakes and waterways, as well as commitments to 2020 greenhouse gas reduction targets, to marriage equality, and to combating homelessness in the territory.

In addition to the policy commitments, Mr Rattenbury has been offered a ministry in the Labor-led government, access to all cabinet meetings and additional resources for his office.

Mr Rattenbury said while he had welcomed negotiations with Canberra Liberals leader Zed Seselja, the Liberal party stance on tax reform also played a part in his decision.

"I do also believe it would be irresponsible of me to form a government with a party committed to undoing the tax reform in the territory," Mr Rattenbury said.

He said Mr Seselja was disappointed with his decision to support Labor.

Mr Rattenbury confirmed that he sought advice from federal Greens leader Christine Milne in making his choice, and that he had been in discussion with the ACT Greens membership.

Mr Rattenbury also said he would be supporting a Liberal MLA to take the Speaker's chair.

Gallagher will 'heed community's message'

Ms Gallagher addressed the media shortly after Mr Rattenbury, acknowledging and thanking the Green MLA for his decision to support Labor.

Weve come through an incredibly tough and an incredibly long election," Ms Gallagher said.

I am proud to have led the Labor team back into government at this point in the national political cycle, and to have managed a small but significant swing towards us, including additions to our team."

ACT Labor is the first state or territory Labor government in Australia to win an election in more than two years.

Ms Gallagher said she will be "heeding the messages" of the October 20 poll, and aims to continue Labor's agenda for health, education, jobs and services in Canberra.

Our parliament is simply too small to allow for anything over than total commitment by the government of the day, and I propose to continue this as I began in May last year full of energy, speed and focus.

No one party has ownership of the best ideas, and as Chief Minister I will welcome any proposal or any ideas which will have the Assembly working more collaboratively."

Ms Gallagher said ministerial arrangements were yet to be finalised, but said she is confident the arrangement with Mr Rattenbury will work "for the long term".

Seselja disappointed, but 'will fight on'

Canberra Liberals leader Zed Seselja expressed disappointment with Mr Rattenbury's choice, especially after a significant swing towards the Liberals at the October 20 poll left the party with a narrow 41-vote win over ACT Labor.

"Obviously Im very disappointed with the result," Mr Seselja said.

"This will be the first time in the territorys history that the party that received the most votes from the electorate doesnt have the opportunity to form government."

Mr Seselja said he didn't think his stance against offering the Green MLA a ministry made a significant difference in Mr Rattenbury's decision, pointing towards previous examples when the Greens had sided with Labor even when a ministry was on offer.

The Liberal leader said he would work with Mr Rattenbury in the Assembly, but made it clear that he saw the sole remaining Green MLA as sitting firmly on the Labor side of the floor.

"I will work constructively with Shane Rattenbury on behalf of the Greens, but Shane Rattenbury is part of the government. He has chosen to be part of the government," Mr Seselja said.

"I made the point on election night that people didnt exactly embrace at this election the Labor-Greens coalition, and that I thought it would be a mistake for them to respond by going into a closer coalition. But thats what theyve chosen to do, that is their choice.

"I would simply make the additional point that I dont believe that 15 years of Labor will be good for this territory."

Mr Seselja again confirmed he would stay on as Liberals leader, and vowed to continue working hard to serve the community.

We are a strong team, the biggest Liberal team ever to serve in the ACT Legislative Assembly, we are a very talented and strong team, and we believe we will make a very, very big difference," Mr Seselja said.

He also confirmed that the Liberals would accept the offer of the Speaker's chair.

Greens member to join Labor's cabinet

Mr Rattenbury told ABC radio this afternoon that the extra workload on him was going to be amplified by the loss of his colleagues in the Assembly.

"There will only be one of me, and it is going to be challenging," he said.

He also said no final decision had been made on which ministry position would be offered to him.

"The Labor party has their own process to go through yet," Mr Rattenbury said.

"Ive expressed some views and some areas I might be interested in, but it will be a conversation over the coming days."

As the Greens Minister, Mr Rattenbury will also be given full access to cabinet confidentiality, "but not cabinet solidarity" the Labor-Greens agreement reads.

While Mr Rattenbury will be allowed to vote on matters within the cabinet, if he is going to vote against any proposals he must remove himself from further cabinet discussion on the matter. He will, however, be allowed to then speak publicly about his position on the proposal.

Ms Gallagher told ABC radio that Labor caucus would meet on Monday to vote on the make-up of the cabinet, and other positions within the party.

"I will be hoping, subject to all things going smoothly, that next Tuesday we will have portfolio announcements," Ms Gallagher said.

The eighth Legislative Assembly is due to meet for the first time on Tuesday next week.