Signs of breakthrough after British election deadlock

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Prime Minister Gordon Brown's Labour party has failed to strike a power-sharing deal with the Liberal Democrats, reports said Tuesday, fuelling talk of a deal to form a new Conservative-led government.

In fast-moving developments, Conservative leader David Cameron visited his party's head office as his negotiators continued talks with the Lib Dems on an accord to break the deadlock after Thursday's general election.

The BBC cited a Downing Street official acknowledging that the Labour-Lib Dem talks, launched Monday amid frantic efforts to form a government following last Thursday's inconclusive general election, "will reach no conclusion".

A senior peer from the third party centrist Lib Dems also seemed to confirm the reports, saying: "I believe there won't be an offer from the Labour party."

Neither Brown's Downing Street office nor the Labour Party would comment on the reports by the BBC and Sky News, which came a day after the British premier announced he would stand down in a bid to give a filip to Labour-Lib Dem talks.

In Thursday's general election, the Conservatives won 306 seats in the 650-member House of Commons -- 20 short of a clear majority of 326 -- followed by Labour on 258 and the Lib Dems on 57.

The Conservatives and Lib Dems held talks on a power-sharing deal first but then Brown offered to quit Monday.

This had been seen as a condition for talks with the Lib Dems and prompted the Tories to offer a major compromise on electoral reform to the third party, which has emerged as the kingmaker amid the post-poll stalemate.

The BBC cited a senior Lib Dem official as saying the power-sharing offer from David Cameron's Conservatives was now "the only deal in town." The Lib Dems declined to comment.

But Lib Dem peer Roger Roberts, a former head of the party in Wales, told the BBC there could be a decision taken before 9:00 pm (2000 GMT) Tuesday.

"I believe there won't be an offer from the Labour party," he said. "The feeling is we have to have a government -- if this (a possible deal with the Tories) is the only way we can get it, we'll go along with it."

Amid the Sky and BBC reports, Health Secretary Andy Burnham indicated that he agreed with former home secretary David Blunkett, who has said that Labour should admit defeat and not try to form a coalition with the Lib Dems.

"I think we have got to respect the result of the general election and you cannot get away from the fact that Labour didn't win," he told the BBC.

"I think David has spoken with real authority on this matter. I would say that clearly the lead option would remain the largest party speaking to the Liberal Democrats."

Earlier Tuesday Cameron piled pressure on Clegg's third party centrists to decide which way to jump after he offered Monday a make-or-break concession on their touchstone issue of electoral reform.

"It's now I believe decision time, decision time for the Liberal Democrats," said Cameron, adding: "I hope they make the right decision that will give this country the strong, stable government it badly needs and badly needs quickly."

Clegg had said negotiations were entering a "critical and final phase", adding he was as "impatient as anyone else" for a decision. "I'm certainly hopeful of getting a resolution as quickly as possible," he said.

Labour and the Lib Dems are ideologically closer, on the left of the political spectrum, than the centre-right Conservatives and the Lib Dems, although the electoral arithmetic of a Tory/Lib Dem deal is stronger.

Sterling rose on the reports that Labour-Lib Dem talks had failed, with one pound gaining ground from 1.4790 dollars to 1.4933 dollars, while the FTSE-100 share index also rebounded.

The FTSE 100 had earlier fallen over two percent Tuesday, amid investor concerns that a Labour/Lib Dem government could lack the clout to reduce Britain's massive debt after its worst recession on record.

© 2010 AFP

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