(CANBERRA) -- Neon signs blazoned with XXX Adult Videos jut out from concrete showrooms crammed between car repair yards and engineering workshops.

A few sandwich boards advertising sex magazines litter the pavements of the wide, gray streets of the industrialized zone of Fyshwick in the Australian capital of Canberra.

It's hard to imagine a less-erotic location.

But welcome to the headquarters of Australia's lucrative sex industry, which not only thrives in the shadows of the national parliament but also hopes to win over enough voters to make a mark in this year's general election.

The above-the-board nature of the industry has led more than 300 small and medium-sized businesses and two public companies -- Sharon Austen Ltd and Adultshop.com Ltd -- to join forces in an active lobby group, the Eros Foundation.

The foundation's aim is clear -- throw out the conservative government of Prime Minister John Howard and its aversion to all things smutty.

``The public attitude toward sex in Australia is very liberal but members of parliament have a different approach totally,'' Eros Foundation spokesman Robbie Swan told Reuters.

``We want to address that gap and hopefully we can because the sex industry in Australia is unusual internationally to have a united voice and be politically astute.''

Sex industry players are directing their fire against Howard because he has stamped out the nation's phone sex industry and legislated against online gambling and pornography during his five years in power.

PORN PERMITTED

But although Howard might have cleaned up a bit of cyber-space, he has been unable to clean up the government's doorstep with the sex industry booming just 7.5 miles from parliament in Canberra, the capital of politics that has also become Australia's heartland of porn.

Canberra, home of the nation's mini-army of public servants, is governed by the Australian Capital Territory (ACT), currently in the hands of Howard's Liberal Party.

The sale, production, duplication and distribution of pornographic videos with an X-rating is illegal in all of Australia's six states, but permitted in the ACT and, to a lesser degree, the remote Northern Territory.

The ACT government -- which also has some of Australia's most lenient laws on cannabis with on-the-spot fines for possessing small amounts -- legalized trade in X-rated videos in 1995 and is now the hub of a thriving mail-order business.

``The government of the day and subsequent governments decided the benefits to the community in terms of the revenue gained from the imposts on the industry were not to be shunned,'' an ACT government spokesman told Reuters.

The local government designated three industrial zones as permitted sites for the industry, ensuring it did not offend Canberra's 308,000 residents, and a 1.1 mile-square pocket of Fyshwick has become the prime sex spot.

The industry has grown rapidly with the X-rated video mail-order business estimated by Eros to be worth $25 million in turnover a year -- making it the ACT's second biggest export business after timber.

BEHIND-THE-SCENE ACTIVITY

Swan estimated the sex industry overall was worth about $750 million a year nationally -- with brothels around the country receiving 12 million visits a year in a population of 19 million.

Canberra has 15 sex shops and 16 licensed brothels.

Yet it is the behind-the-scene production line churning out hard-core porn videos that makes the big bucks.

Australia's sex industry only films a handful of its own movies but the backrooms are busy duplicating porn brought in under copyright from the United States and Europe.

``The mail-order branch is the real money spinner in the industry,'' says Kallin Dunsire, operations manager of the Adult World warehouse.

The Eros Foundation doggedly pursues the government, campaigning against censorship in its glossy, bi-monthly journal and pushing for a new classification of X-rated videos to legalize them nationwide.

With a national election tipped for December, the Eros Foundation has started to flex its political muscle, saying it has 640,000 people on its mailing list, many rural-based, who will be urged to dump the Howard government.

Sample voting cards with the slogan ``Keeping the bastards out of your bedroom'' have been prepared to show people how to direct preference votes against the government.

Eros spokesman Adam Herbst says the foundation's campaigning could make a difference in seats held by the coalition government with a slim margin, and help wipe out the five-seat majority with which Howard is clinging to power.

The foundation funded stripper Jody Moore as an independent candidate in a by-election in the Queensland seat of Ryan in March this year -- and she won 1.86 percent of the vote.

``There's a lot of seats in the coming election that are held with a margin of less than half a percent,'' Herbst told Reuters.

``Just 200 or 300 votes could change these seats so we could make a critical difference come election day.''