DAVID Cameron was today offered the keys to 10 Downing Street, after Liberal Democrat leader Nick Clegg said that the Conservatives had the "first right" to seek to form a government in Britain's first hung Parliament since 1974.
The Conservative leader will give his initial public response in a statement at 2.30pm, but it was thought far from certain that he would accept any deal with the Lib Dems which included reform of Westminster's first-past-the-post voting system.
Tories do not have the voting strength to maintain an outright majority in the new House of Commons, but may hope to govern as a minority administration with support from Northern Irish unionists, rather than offer the electoral reform that is likely to be an essential condition of any deal with the Lib Dems.
Senior Labour ministers including Lord Mandelson and Peter Hain left no doubt that the party would be ready to deliver some form of proportional voting system in return for Lib Dems joining them in an "anti-Conservative progressive majority" in the Commons.
Prime Minister Gordon Brown this morning fired the starting pistol on what is expected to be several days of haggling over a coalition government when he ordered the head of the civil service, Cabinet Secretary Sir Gus O'Donnell to provide official support for discussions between the parties.
In a statement issued by 10 Downing Street, Mr Brown left no doubt that he is not intending to step down immediately as Prime Minister as a result of Labour losing its majority in Parliament in yesterday's election.
Mr Brown said he had "a duty as Prime Minister to take all steps to ensure Britain has a strong, stable and principled government".
But Mr Cameron insisted that Labour had "lost its mandate to govern our country", as his party raced ahead in terms of seats won in the new Parliament.
The Conservatives were on target to gain more seats in this ballot than in any General Election for 80 years, said Mr Cameron after winning his Witney constituency in Oxfordshire.
With 29 seats left to declare, the Conservatives had 291 MPs, with Labour on 251 and the Lib Dems on 52. None of the parties were able to reach the 326 threshold for outright victory.
See all the results and the big stories of the night here.
• Don't miss the Dorset Echo's election special on Friday.