Violence in East Timor was sparked when Prime Minister Xanana Gusmao announced his National Congress for Timorese Reconstruction will form a coalition government with two smaller parties.

CNRT won the most seats at the general election, but was still three short of an outright majority. Mr Gusmao's decision to join forces with the Democratic Party and Frente-Mudanca condemns the election runner-up Fretilin to another five years in opposition.

Presenter: Richard Ewart

Speakers: Dr Michael Leach, East Timor specialist, Swinburne University

Leach: In the East Timorese system unless a party gets a majority which didn't happen this time or last time, this is always the trickier period, the formation of government rather than the election. And yesterday the CNRT made a decision that it would form a coalition with PD and a smaller party called Frente-Mudanca. This is where Fretilin supporters are always going to be at the point at which they were going to be disappointed rather than the election outcome itself. Look there's some suggestion that yes there might have been some Fretilin supporters involved, that needs to be investigated. There's also a suggestion that there might have been some provocation from CNRT delegates at one point. There are a few sources that are reporting that. But I certainly heard the same as the UN you just talked to that in fact those cars were mostly stoned rather than burnt, and there's a couple of other incidents, but everything remains calm this morning.

Ewart: Now in terms of the way that Xanana Gusmao has put his coalition together, there was a suggestion certainly a week or so ago that he was prepared to talk to Fretilin, but it's been suggested to me that if those two; the CNRT and Fretilin had joined forces it would effectively leave Timor with no real opposition?

Leach: Well that's right, I mean they would have had the PD which has eight seats. Certainly PD was concerned that there might be a CNRT-Fretilin coalition, that's my information they've been a little bit concerned about that, so they'll be relieved with yesterday's result. Obviously Fretilin's a much larger party, it has 25 seats and would no doubt make a better and more effective opposition than a smaller party with eight seats.

Ewart: So in terms of the coalition that we now have, I know Fretilin was quoted as saying they wanted a government of the best talent. Do we have that in Timor?

Leach: Look those negotiations are still to happen. What happened yesterday is that the CNRT has expressed its view on who it wants to align with. What still has to happen is that CNRT and PD now have to go horse-trading and do the actual negotiations. So this is not quite over, and then the President has to appoint that government. In those negotiations what's going to come up and what's going to be the key issue is the distribution of ministries between CNRT and PD. Now in the last government CNRT didn't end up with many ministries to keep a multi-party coalition together. This time I'm assuming they're going to want more ministries, because they had a very good performance. But PD is in a strong bargaining position because one of the interesting things about the election is that Fretilin plus PD could be a majority as well. So they have that sort of extra bargaining power with the CNRT. I think it's quite likely that they will go with CNRT, I think that's the most obvious result at this point. That's probably what will happen, but they also have that pressure they can apply to CNRT to get more ministries.

Ewart: What though does the future hold do you think for Fretilin as a party, because it seems to be based on the outcome of this election losing support, and also what does the future hold for Mari Alkatiri, he was the first prime minister in a post-independence East Timor and now he seems to be on the outer?

Leach: Well it may be an opportunity for Fretilin now to renew its leadership I think after this second defeat. We may see that happening over the next few months, there was likely to be some talk, some discussions, some activities in relations to the Fretilin leadership, we might see that happen. The interesting issue is down the track there are two political forces in the country and some people might argue that they're in fact Xanana Gusmao and Fretilin. The CNRT party it's going to be interesting to watch how Xanana develops new leaders inside his party because the party's very much revolved around his very strong charismatic personality, his legacy of the resistance struggle, he gets a lot of personal support. One of the interesting things in five years time if he were to resign is how CNRT would fare after that, and to do that they're going to have to promote some new leaders below Xanana to allow a transition when he does retire.

Ewart: In terms of the UN and situation in East Timor and if and when the peacekeepers eventually leave, do you think that we're getting closer to that now, I mean do we have stability based on the outcome of this election?

Leach: I think we're getting there. I mean last night's developments were a little bit of a worry but if you compare those to 2007 they were reasonably minor. So obviously we need to keep an eye on this over the next week in the formation of government. But as the UN just said the national police responded pretty well last night, things are I believe calm at the moment. If that continues over the next week then certainly things bode well or reasonably well for the departure of UN and Australian troops toward the end of this year.