(Updates with more results and and reaction)

OTTAWA, Oct 14 (Reuters) - Canadian Prime Minister Stephen Harper, the first Western leader to face the electorate since the financial meltdown, won re-election with a significantly stronger minority government on Tuesday.

The Conservatives, who convinced voters they were the best choice to steer Canada through the economic turmoil, will still need opposition support to govern.

It will be Canada’s third minority government in four years. Harper’s Conservatives defeated a Liberal minority government in the January 2006 election.

Initial results showed the Conservatives got 37 percent of the popular vote, just a fraction above the 36.3 percent they got in 2006. Vote-splitting on the left meant the party ended up in a much stronger position.

Initial television projections put the Conservatives at 144 of Parliament’s 308 seats, up from the 127 they held before the election but short of the 155 needed for a majority.

The opposition Liberals were at 74. The separatist Bloc Quebecois were up two to 50 seats, the leftist New Democrats were up eight to 38 seats. Independents took two seats and the Greens had none.

“We were expecting a minority government. It looks like it will be a strengthened one. We’re going to get right back to work -- that’s what people expect us to do,” Health Minister Tony Clement told Global Television.

Harper became only the second Canadian prime minister, after Liberal Lester Pearson in the 1960s, to win a second consecutive minority government.

The Liberals, who have historically governed Canada for longer than any other party, looked set for their worst performance since 1984. The rout could trigger an internal battle to replace leader Stephane Dion.

The Conservative leader ran on a modest platform of keeping taxes and spending under control. The Liberals proposed introducing a carbon tax while cutting income taxes and boosting social spending, and Harper said the Liberal plan would throw Canada into recession.

Dion, a bookish francophone who sometimes makes mistakes in English, found it a hard sell at a time of relatively high energy prices to pitch his carbon tax plan.

“I think my party failed to deliver a real cogent response to the economic and financial crisis,” said defeated Liberal legislator Garth Turner.

Dion started to cut into Harper’s lead during the campaign as he charged the prime minister, a former economist who is also fairly wooden, was not doing enough to prevent financial contagion from spreading into Canada.

But the Conservative lead over the Liberals widened again in parallel with specific action taken to improve Canadian bank liquidity. Harper had the added benefit that markets and the Canadian dollar rebounded on Election Day.

SPLIT ON THE LEFT

One of Dion’s problems was that he was competing with two other parties on the left nationally -- the New Democrats and the Greens -- and a fourth party, the separatist Bloc Quebecois in the province of Quebec.

Each party made the pitch it was the best one to deny Harper a second term. Just as a split on the right guaranteed Liberal rule from 1993 to 2006, a split on the left now helped the Conservatives.

A Conservative majority looked within reach at times during the campaign, but besides questions on the economy, Harper lost major support in Quebec over cuts to arts funding and plans to give adult sentences to violent youth criminals.

The Conservatives, who began the campaign hoping they might pick up a significant number of Quebec seats, lost one of their 11 seats in the province, according to provisional results.

The careers of both Harper and Dion were on the line. Dion, who became Liberal leader in 2006, was re-elected to Parliament but due to his national defeat his party under its rules will have to decide whether to replace him.

The Liberals questioned what the point was of having an election when the result was another minority government.

Harper had said earlier that even if he only got a second minority, he would be in a stronger position than he had been 2 1/2 years into the minority mandate he won in the 2006 election since opposition parties would be less likely to topple him for now.

“This was about trying to reset the clock and move forward,” Conservative strategist Sandra Buckler told CTV. (Additional reporting by Louise Egan, Allan Dowd, Jeffrey Jones and Scott Haggett; Editing by Peter Galloway and Peter Cooney)