Australia's opposition dumps policy on return to office as election nears

SYDNEY (Reuters) - Australia's opposition Liberal Party abandoned on Monday a plan to force government workers to return to the office full-time, as incumbent Labor gained in polls ahead of a May 3 election.

Working from home emerged as an election battleground last month after the Liberal Party said it would bar hundreds of thousands of government employees from doing so, in a bid to boost productivity.

The policy was seized upon by Labor which claimed it would increase commuting costs in a campaign that has been dominated by cost of living concerns.

"We've made a mistake in relation to the policy. We apologise for that. And we've dealt with it," Liberal leader Peter Dutton said in an interview with Channel Nine on Monday.

Dutton's suggestion of job sharing for women affected by a full-time return to the office also came in for strong criticism from Labor.

"Peter Dutton wants to undermine work rights and in particular doesn't understand modern families, doesn't understand the important role that women and men play in organising their families," Prime Minister Anthony Albanese said on Monday.

Labor and the Liberal-led centre-right coalition are near-deadlocked in the latest opinion polls, with swing seats on the outskirts of major cities - among the most exposed to the high cost of living - likely to be crucial.

Labor saw a modest bounce in outer metropolitan areas in the weeks after the Liberal Party unveiled its plan for curbs on working from home, polling by YouGov showed.

After consistently polling behind the opposition coalition when votes from smaller parties are redistributed at the beginning of the year, Labor has led narrowly in the last three opinion polls released this month.

(Reporting by Alasdair Pal in Sydney; Editing by Clarence Fernandez)