Big parties woo Britain's kingmaker

LONDON - Britain's inconclusive election has turned into high political drama, with the Conservatives and Labour Party wooing a potential ally as the markets pressed for results and a public accustomed to clearer outcomes watched transfixed.

Conservative leader David Cameron, ahead but shy of a majority, seized the initiative with a "comprehensive offer" to the ideologically dissimilar but possibly willing Liberal Democrats.

Labour incumbent Gordon Brown, beaten but still battling, dangled before the Liberal Democrats their dream of major electoral reform. A weekend of frantic negotiations loomed - but momentum seemed to be with the youthful Cameron.

Liberal Democrat leader Nick Clegg did not immediately respond in public to his opponents' overtures, but said earlier that the party that had gained the most seats and the most votes - the Conservatives - should have the first right to try to govern.

"I think it is now for the Conservative Party to prove that it is capable of seeking to govern in the national interest," he said.

Ideologically, the center-left Clegg has more in common with Brown. Both oppose the immediate cuts Cameron says are needed to begin rebalancing Britain's debt-burdened economy and both have attacked his Tories as the party of privilege. Clegg has clashed with Brown and Cameron over Britain's expensive submarine-launched nuclear deterrent, which the Liberal Democrat leader has indicated he may want to scrap.

But the Conservatives have held out the tantalizing prospect of Liberal Democrat seats in a Tory government, with senior Conservative lawmaker William Hague saying Cabinet posts were not "off the table."

The 43-year-old Cameron said "we have to accept that we fell short of an overall majority" as results showed his party had won 306 of the 650 seats in the House of Commons - less than the 326 needed for outright victory.

"Britain needs strong, stable decisive government and it is in the national interest that we get that on a secure basis. ... I want to make a big, open and comprehensive offer to the Liberal Democrats," he said.

But Cameron promised only a "committee of inquiry" to look into the Liberal Democrats' major goal, reform of Britain's electoral system so that the number of seats gained is based on the percentage of vote a party achieves. They say that is fairer than the current system, in which a party can win a parliamentary majority by getting only a third of votes.

Cameron also left open the option of trying to form a minority government if the Liberal Democrats turned him down.

Brown, too, appealed to the Liberal Democrats to make a deal, and went farther than Cameron by promising quick legislation on electoral reform.

"There needs to be immediate legislation on this to begin to restore the public's trust in politics," Brown said.

"The question for all the political parties now is whether a parliamentary majority can be established that reflects what you, the electorate, have told us," Brown said in a statement delivered outside 10 Downing St. - still his home, at least for now.

Even a deal with the Liberal Democrats would leave Labour a few seats short of a majority, meaning they would have to turn to Scottish and Welsh nationalists for further support.

Final results in Thursday's election gave the Conservatives 306 seats it the 650 seat House of Commons. Labour won 258 seats, the Liberal Democrats 57, and smaller parties 28. Voting in one constituency was postponed until later this month because of the death of a candidate.

Thursday's closely fought election was the first since 1974 to produce a "hung Parliament," in which no party has overall control. The prospect of days, and possibly weeks, of political horse-trading unsettled the financial markets. As the pound and the FTSE-100 index fell sharply, pressure mounted for a quick solution.

"It's vital that this political vacuum is filled as quickly as possible," said Miles Templeman, director general of business group the Institute of Directors. "The country simply can't afford an extended period of political horse-trading which delays much-needed action to tackle the deficit."

Observers both inside and out of the country were following developments with interest.

"It's a bit fascinating to watch," White House press secretary Robert Gibbs told reporters Friday. "We look forward to working with whoever is the prime minister."

Cameron and Clegg held telephone talks Friday, kicking off a furious round of negotiations. Clegg was later seen leaving his party's headquarters near Parliament, while Hague and George Osborne, another senior Tory figure, were both seen leaving a meeting at the Cabinet office.

All declined to comment on the prospects of any potential deal.

Although Britain has no written constitution, senior civil servants have been careful to lay out the rules in the event of a hung Parliament and avoid even more market-rattling uncertainty.

Mandarins from the prime minister's office, the civil service and Buckingham Palace will make sure all parties are kept informed as politicians meet and wrangle. Queen Elizabeth II, as head of state, will ultimately have the job of inviting someone to become Britain's new prime minister - but she plays no role in deciding who that will be.

The parties hope to make a deal before the financial markets reopen Monday, but talks could drag on until May 25, the date set for the queen to read out the new government's plans for the upcoming term of Parliament.

Such a long period of political wrangling and confusion in one of the world's largest economies could unsettle global markets already reeling from the Greek debt crisis and fears of wider debt contagion in Europe.

Britain's budget deficit is set to eclipse even that of Greece next year, and whoever winds up in power faces the daunting challenge of introducing big spending cuts to slash the country's huge deficit.

The FTSE 100 share index ended 2.6 per cent lower Friday amid the uncertainty, while the British pound traded as low as $1.4449 by late morning. It rallied to $1.4720 by late afternoon, still down sharply from $1.51 Thursday morning.

Turnout for the election - the closest-fought in a generation - was 65.2 per cent, higher than the 61 per cent in Britain's 2005 election.

Some polling stations were overwhelmed by those interested in casting ballots, and anger flared as hundreds of people were blocked from voting when polls closed. Electoral Commission chief Jenny Watson acknowledged that Britain's paper voting system had been unable to cope with a surge of voters.

It was an election that confounded political certainties: What appears a Conservative victory is a defeat for reforming leader Cameron. The Liberal Democrats' poor showing still leaves them kingmakers. And the battered Brown could stay prime minister despite Labour's worst showing in decades.

"I have a feeling Gordon Brown will have to be dragged from No. 10 with his fingernails in the door posts," said Victoria Honeyman, a lecturer in politics at the University of Leeds.

For Cameron, a bicycle-riding graduate of Eton and Oxford who staked his leadership on returning the Conservatives to power after 13 years, the result is less than a triumph.

The Tories fell short of a majority that only a few months ago was considered inevitable, and Cameron's right-wing opponents within the party may prevent him offering concessions to the Europhile, civil libertarian Liberal Democrats.

Tim Montgomerie, who runs grass roots website Conservative Home, said many activists would be disappointed with Cameron's campaign. Some traditionalists have complained Cameron failed to address core party issues like immigration, instead focussing on a confusing message about building a "Big Society." A large number of Cameron's favoured younger candidates failed to capture seats.

"As he enters his talks with Nick Clegg, David Cameron has got to realize that he's not just building a coalition outside the party - he's got to build a coalition inside the party, too," Montgomerie said.

The biggest disappointment may belong to Clegg, whose party surprisingly failed to capitalize on his stellar TV debate performances and mid-election polls showing him rivalling Labour for second place. The party ended up with six fewer seats than before the election.

Bill Jones, a professor of politics at Liverpool Hope University, said Clegg's support had turned out to be soft.

"People thought, 'he looks like a nice young man, he seems to be talking a lot of sense and he is quite handsome,"' Jones said. "It was like a passing love affair the electorate had with Clegg. But it ended."

- AP