ST. JOHN'S, N.L. - Kathy Dunderdale made history Tuesday by becoming the first woman elected premier of Newfoundland and Labrador as she led the Progressive Conservative party to its third-straight majority government.

"My heart is stirring with pride tonight," Dunderdale told throngs of supporters at a downtown St. John's hotel.

"As I stand here tonight, I can't help but wonder what my grandmother and great grandmother would think. Until 1925, a woman could not vote in Newfoundland and Labrador."

The victory also allows her to step from the shadow of the legendary Danny Williams nearly a year after he left office, but Dunderdale returns with a reduced majority as the Tories were elected in 37 ridings.

Dunderdale, 59, easily won her St. John's-area riding of Virginia Waters. But the night wasn't without loss for the Tories, as two of their cabinet ministers went down in defeat.

The New Democrats, a perennial third-place finisher in the province, also made a breakthrough as the party won five seats -- its highest total ever. But the Liberals clung onto official Opposition status, as they were elected in six ridings.

The Conservatives won 56 per cent of the popular vote, while the NDP took 25 per cent. The Liberals earned 19 per cent.

Going into the campaign, the Tories held 43 seats in the legislature compared to four Liberals and one New Democrat.

The Liberals started the campaign saddled with a $600,000 debt and a last-minute leadership change. Kevin Aylward took over from Yvonne Jones in August when she suddenly stepped down to focus on her recovery from breast cancer. She did, however, decide to run again in her Labrador riding of Cartwright-L'Anse au Clair, which she won handily.

Aylward, 51, a former provincial Liberal cabinet minister, campaigned hard on two key messages. He believes rural Newfoundland is being left behind, and that the $6.2-billion Muskrat Falls hydro deal in Labrador is a bad bargain that will raise light bills and pile on provincial debt.

His message appeared to resonate in some rural outports, where the Liberals made their gains.

But it did not sway voters in the western riding of St. George's-Stephenville East, where he lost to Education Minister Joan Burke. He is the second Liberal leader to fail to win a seat in as many elections.

Still, he congratulated his fellow candidates on their success and praised them for increasing the party's seats in the legislature.

"I am proud of the fact that the Liberal party itself is going to be alive and well and can rebuild now with the new members that we have in the House of Assembly tonight," he told party faithful.

Speaking later to reporters, Aylward said he would stay on as leader.

Led by Lorraine Michael, a former nun who entered politics five years ago, the NDP built upon the momentum their federal cousins generated during the federal election in May. When the campaign began, she was the lone New Democrat in the legislature.

On Tuesday night, she said the NDP's gains -- which all except for one were in St. John's and at Tory expense -- were the result of years of hard work.

"You can't have a historic victory without a history," said Michael, who was re-elected in her downtown St. John's riding of Signal Hill-Quidi Vidi.

Michael, 68, campaigned on a promise to impose a three-per-cent surtax on the province's lucrative offshore oil sector and redistribute that wealth to pay for improved health services. That position stoked some controversy on the campaign trail, particularly after she admitted she didn't seek a legal opinion before committing to it. But she stood by her share-the-wealth message.

Dunderdale ran a classic front-runner's campaign without any major gaffes or major promises. She found herself fending off opposition attacks over the viability of the Muskrat Falls project, the plight of the province's rural outports and her ties with Prime Minister Stephen Harper. But they did not stick.

After her victory speech, Dunderdale called on Harper to recognize what she said were "the legitimate needs and aspirations" of Newfoundlanders and Labradorians.

"We certainly haven't felt that we've been heard and in lots of ways, the things that we asked for from the federal government weren't acknowledged in any kind of a meaningful way," she said.

"Now that's what I want from the prime minister. Whether or not I'm going to get it remains to be seen."

The province has had rocky relations with Ottawa in the past, though they have warmed somewhat under Dunderdale's leadership. She is banking on Harper to follow through on a loan guarantee for Muskrat Falls, which the federal government has said would be finalized by Nov. 30.

Harper issued a statement Tuesday night congratulating Dunderdale.

"I look forward to working with Ms. Dunderdale on issues that matter to Newfoundlanders and Labradorians and all Canadians, including the challenges posed by the current global economic climate," he said.

Dunderdale is the fourth incumbent provincial premier to get re-elected this fall. And since she took over for Williams last December, three other women have also become premiers.