British parties in talks to end post-vote deadlock
Britain's two main opposition parties dug in for post-election talks on forming a government Sunday, fighting to overcome policy differences and break a stalemate which has left the nation in limbo.
Conservative and Liberal Democrat negotiators held a fresh round of talks after Thursday's vote ended in a hung parliament, though a deal is not expected before markets open Monday, prompting fears of trading floor turmoil.
Both sides stress their willingness to do a deal, with Liberal Democrat leader Nick Clegg -- whose third-placed party could play kingmaker -- hinting they may even compromise on the key policy of electoral reform.
Prime Minister Gordon Brown is still leading the country, despite the fact that his Labour Party crashed to electoral defeat and he is facing calls to step down, because no single party has an overall majority.
His Labour party could yet make an agreement with the Lib Dems and smaller fringe groupings if their talks with the Tories collapse.
Speaking outside his London home before joining the talks, Clegg said he was "keen that the Lib Dems should play a constructive role at a time of great economic uncertainty".
He also indicated his party could be willing to compromise on one of its key policies, electoral reform. Listing key priorities, he stressed simply "extensive fundamental political reform".
This contrasts with his repeated calls on the campaign trail to ditch Britain's first-past-the-post system for proportional representation, which would favour the Lib Dems.
The Conservatives were also sounding optimistic about the prospects of a deal.
Entering the talks in central London, foreign affairs spokesman William Hague said the parties were "very respectful of each other's positions".
And Cameron told supporters in an email Saturday that "these negotiations will involve compromise" and the two sides "won't rush into any agreement".
It is thought a final deal is unlikely by Monday morning when the financial markets open but the parties may bid to reassure traders by issuing an interim statement.
Michael Gove, a key ally of Cameron, told the BBC it was "important that we show progress by tomorrow when the markets open" amid fears that sterling and London's FTSE 100 could dip again.
Despite the negotiations and a Sunday Times/YouGov poll which suggested 62 percent of people want him out of 10 Downing Street now, Brown signalled he means to fight on.
"My resolve has not, and will not, change," Brown wrote to Labour Party members.
"I pledged to do everything in my power to fight for the people of this country -- to secure the recovery, to protect their livelihoods and to continue to fight for a future fair for all."
There has been talk that Brown, whose party has been in power for 13 years, could be replaced by a figure like Foreign Secretary David Miliband if the Tories and Lib Dems reach agreement.
The centrist Lib Dems are seen as closer to centre-left Labour in most policy areas and there have been warnings that it may not be easy for them to secure a deal with the centre-right Conservatives.
Former Lib Dem party leader Paddy Ashdown, who met Clegg for talks Sunday, told the BBC there was a "mountain to climb" if they were to forge an agreement.
Simon Hughes, a senior Lib Dem on the left of the party, said the Conservatives would have to give more ground on the issue of electoral reform. Cameron has so far suggested an inquiry.
"If there's to be a deal, an arrangement, a coalition, whatever it is, with the Conservative Party, they will have to move from the position they've been in, that's unarguable," he told Sky News television.
Any alliance involving the Lib Dems has to be first approved by their lawmakers, the ruling executive and potentially their full membership in a complex system known as the "triple lock".
If a deal cannot be done with the Lib Dems, Cameron is prepared to try to rule as leader of a minority Conservative government, relying on ad hoc support from smaller parties.
© 2010 AFP