Fireworks lit up the Melbourne Cricket Ground
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Prince Edward has formally closed the 2006 Commonwealth Games in Melbourne, bringing to an end 11 days of competition involving 4,500 athletes.
Prime minister Tony Blair was also at the ceremony to witness Melbourne hand over the Commonwealth Games flag to 2010 host, New Delhi.
Performers at the colourful ceremony included Dame Edna Everage, Indian actress Aishwarya Rai and John Farnham.
A spectacular firework display provided a rousing finale.
Melbourne 2006 chairman Ron Walker said the 18th Commonwealth Games had been a success.
"We have all been united by the moment," Mr Walker said. "Melbourne - we did it!"
Commonwealth Games Federation (CGF) president Mike Fennell said: "Now we set our sights on 2010 and Delhi.
"With the inspiration derived from these games and the standard of excellence that has been set, it will be a hard act to follow.
"But we have every confidence that the bar will again be raised in 2010."
India will host the Commonwealth Games for the first time in 2010
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He also announced that Indian shooter Samaresh Jung was the winner of the inaugural David Dixon Award.
Jung won five gold medals along with a silver and a bronze medal and set three new Games records.
The award, named after a former CGF honorary secretary, is given to the outstanding athlete at each Commonwealth Games.
Australian rock band Grinspoon got the closing ceremony at the Melbourne Cricket Ground under way, followed by performances from other famous Australian musicians.
The Commonwealth Games Federation (CGF) flag was lowered and handed to Suresh Kalmadi, Chairman of the Organising Committee for the 2010 Delhi Games.
Around 800 Indian performers marked the handover of the Games to Delhi with a Bollywood spectacular.
Former Indian cricket captain Sunil Gavaskar, who earlier this week called for cricket to be included as a Commonwealth Games sport, was also part of the celebrations.
The extravaganza included 1,000 Dame Edna lookalikes, who danced around the MCG stage.