Rajapaksa's United People's Freedom Alliance (UPFA) lost the parliamentary elections, coming second as it secured 95 seats in Monday's poll won by incumbent Prime Minister Ranil Wickremesinghe's United National Party (UNP) with 106 seats, shattering the former president's hopes of staging a political comeback.
Sri Lanka Freedom Party's central committee decided to join a national government with prime minister-elect Wickremesinghe's UNP for a period of two years, SLFP general secretary Duminda Dissanayake said.
This would enable the UNP's broader front - the United National Front for Good Governance - to form a government with a working majority.
The UNP finished seven seats short of the 113 working majority in the 225-member assembly in the polls.
Both Sirisena and Wickremesinghe have been pledging a national government with the participation of the two main political forces during the run-up to the August 17 election.
In the SLFP's UPFA coalition, loyalists of Rajapaksa form a larger part of the 95-member strong parliamentary group.
In the January 8 presidential poll, Rajapaksa was routed by his former health minister Sirisena. He was eyeing a political revival seeking to become prime minister by contesting in Monday's polls.
Sirisena and Rajapaksa are bitter rivals despite being in the same party after Sirisena in November last year broke ranks within the SLFP and joined the then opposition UNP to challenge Rajapaksa and then defeated him.
But Sirisena was not able to withstand pressure from Rajapaksa's loyalists and had to give him a party ticket to contest the polls.
Wickremesinghe is expected to take oath later today as prime minister after finalisation of Election Commission formalities.
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