The Conservatives have won the most MPs in the UK general election but fallen short of a majority, leading to the first hung parliament since 1974.
As counting continues the Tories have gained 92 seats, Labour have lost 86 and the Lib Dems six, despite hopes of a breakthrough for the third party.
The battle is now under way to see which leader can form a government.
Lib Dem leader Nick Clegg said the situation was "fluid" but the Tories had the first right to seek to govern.
Arriving back at Lib Dem headquarters in London, he said: "It is vital that all parties, all political leaders, act in the national interest and not out of narrow party political advantage."
He said he "stuck by" his view that the party with the biggest mandate – in terms of votes and seats – should have the right to seek to govern first. "It seems this morning, that it’s the Conservative Party that has more votes and more seats though not an absolute majority.
"I think it’s now for the Conservative Party to prove that it’s capable of seeking to govern in the national interest."
David Cameron has said Gordon Brown had "lost his mandate". Mr Brown said "stable, strong" government was needed.
The Tories have won 290 seats so far but it is now not possible for them to reach the 326 seats needed to win an overall majority.
Civil service
Mr Brown, whose party has 247 seats so far, has returned to Downing Street with aides and may turn to Nick Clegg’s Lib Dems, who have so far won 51 seats, to try to form a coalition government.
Downing Street has authorised the civil service to support other parties in hung parliament negotiations – essentially giving the go-ahead for talks to begin.
It means the Conservatives and the Lib Dems will be able to call on support from the civil service on policy or logistics.
The BBC projection suggests David Cameron’s Conservatives will have 306 seats. If there are 10 Unionists elected in Northern Ireland then Mr Cameron might be able to command 316 – probably still slightly too few for him to be sure of winning a Queen’s Speech.
But Labour and the Lib Dems together would have 317 seats, according to the BBC figures, which even with three SDLP MPs would still leave them at 320 – again a few votes short of a majority
In other election night news:
Northern Ireland’s first minister and DUP leaderinEast Belfastby the Alliance party TheGreens gained their first MPat Westminster – party leader Caroline Lucas inBrighton PavillionEducation secretary Ed Balls hung on inMorley and Outwoodby just over 100 votes but former Home Secretary Charles Clarke narrowly lost to the Lib Dem candidate inNorwich SouthJacqui Smith, who stood down as home secretary over her expenses,lost her Redditch seat to the Conservativebut Hazel Blears retained her seat in Salford Labour’s Margaret Hodge beat the BNP’s Nick GriffinMargaret Hodge beat the BNP’s Nick GriffininBarking and Dagenham,with a 5% increase in her vote Esther Rantzen came fourth in Luton South, which went to the Labour candidate Lib Dem frontbencher Lembit Opik has lost his Montgomeryshire seat after suffering a 13.2% swing to the Conservatives There were angry scenes and calls for an inquiry after people wereturned away from polling stationsas long queues formed ahead of the 2200 BST voting deadline.
Senior Labour figures have said that under the rules of Britain’s constitution, the sitting prime minister in a hung parliament makes the first attempt at forming a ruling coalition.
Business Secretary Lord Mandelson said Mr Brown had returned to Number 10, and was going to rest and "catch his breath" adding: "We have to be patient for some time more."
"It’s not possible to make definite claims or reach final conclusions about the outcome of the election because there are results still to come in," he said.
"You could say the electorate have voted for change but what they haven’t done is voted decisively in favour of the Conservatives."
Asked if it would be "inconceivable" to have a Labour minority or coalition government which did not have Gordon Brown as prime minister, Lord Mandelson said: "Frankly there are quite a number of permutations."
But he added it was "premature" to "start getting into hypotheses".
Shadow schools secretary Michael Gove said voters would not be "entirely happy" if Mr Brown "after a defeat like this, were to try to cling on and try to form some sort of coalition of the defeated, some sort of alliance of the dispossessed".
He said: "David Cameron has secure a larger number of votes and a larger share of the votes than Tony Blair secured in 2005 when he became prime minister. The logical next step is for David Cameron to form a Conservative-led government."
Mr Clegg – whose party have not performed as well as expected after a poll surge for the Lib Dems after the first live TV debate – cautioned other leaders against "rushing into making claims or taking decisions" which did not stand the test of time.
He urged everyone involved to "take a little time" to ensure people got the government they deserved during these "difficult times".
But he admitted it had been a "disappointing night" for the Lib Dems.
The Conservatives are predicted to take 297 seats in England, with Labour on 194 and the Lib Dems on 41. The Tories have also made significant gains in Wales – where Labour also regained their former stronghold Blaenau Gwent – but the Lib Dems and Plaid Cymru failed to gain target seats.
But in Scotland the Tories failed to make a significant breakthrough, while the Labour vote held up, with the party re-taking two seats it lost in by-elections – Glasgow East and Dunfermline and West Fife. The SNP and Lib Dems fell short of their targets.
Northern Ireland’s First Minister, DUP leader Peter Robinson lost his seat in the first shock result of the night. The other main unionist leader – the UUP’s Sir Reg Empey, was also defeated in South Antrim.
With 17 of 18 Westminster seats declared – the DUP have eight, Sinn Fein have four, the SDLP have three, the Alliance Party has one and one has gone to an independent.
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