UK parliament in limbo, Brown to quit

Pressure mounted on the leader of Britain’s third-place Liberal Democrats, Nick Clegg, to make a decision whether to join the Conservatives in creating a new government or prop up Gordon Brown’s faltering Labour Party.

The opposition parties yesterday agreed on the outline of a deal to work together to form a new government after last week’s inconclusive election, according to Sky News.

Negotiators from the Conservatives and Liberal Democrats would put the proposals to party members, the news channel said in an unsourced report.

Spokesman for both parties refused to comment on the report. Senior party members earlier told reporters they were making “good progress.”

All three parties fear that a long period of uncertainty will rattle financial markets and anger a British electorate impatient for stability.

David Cameron’s Conservative Party – which won the most seats in Thursday’s national vote but fell short of a majority – spent the weekend wooing the Liberal Democrats in hopes of forming an alliance. Cameron and Clegg also spoke on the phone yesterday as teams of party negotiators tried to hammer out a power-sharing deal.

Labour, meanwhile, made its own overtures to the Liberal Democrats – and some observers suggested that Clegg’s party might be open to talks with Labour if Brown agrees to step down.

It’s a critical juncture for Clegg – Britain has not seen a hung Parliament like this since 1974 and his position as kingmaker could determine his party’s influence not only in the next government but in elections for decades to come if the Liberal Democrats can get their main wish – reforming Britain’s electoral system.

Proportional representation is critical to Clegg because it would mean his party would gain a greater share of seats in the House of Commons. On Thursday, his party earned 23 per cent of the vote yet got only nine per cent of the body’s 650 seats.

As talks with the Conservatives continued behind closed doors, Clegg yesterday urged voters to “bear with us a little longer.”

“All political parties, all political leaders are working flat out, round the clock, to try and act on the decision of the British people,” Clegg said. “(But it’s) better to get the decision right rather than rushing into something which won’t stand the test of time.”

Clegg has a tough sell to persuade his party to accept an alliance with Cameron that doesn’t include voting reform.

But the Conservative Party strongly opposes the change, as it would likely mean fewer seats for Britain’s two main parties – it and Labour. So far, Cameron has offered the Liberal Democrats only a review of the voting system and the prospect of a House of Commons vote on changing it – a vote that Clegg is unlikely to win.

Still, the experience of decades in the political wilderness is likely to weigh heavily on the Liberal Democrat lawmakers as they met with Clegg later to discuss the possible alliance.

Like Clegg, Cameron also faces dissent in his ranks – caught between his circle of reformers and the Tory old guard, which blames him for failing to secure a majority in an election that months ago he was supposed to win.

William Hague, Cameron’s de facto deputy, said negotiators had made “further progress” in talks yesterday with the Liberal Democrats.

“The negotiating teams are working really well together,” he said.

Hague said the Conservative negotiating team would report to Cameron and the party’s legislators later yesterday.

Former Conservative Party Prime Minister, John Major, told the BBC radio that a quick deal was necessary. “Everybody is looking at the compromises that may be necessary, but I don’t think this is a dance that can go on for too long,” Major said.

The Liberal Democrats and Conservatives said they’d found some agreement on action to reduce Britain’s record £153 billion ($236 billion) deficit, and likely on reform of the education system.

However, Clegg and Cameron’s groups have wide differences over foreign policy, nuclear power and plans to replace Britain’s fleet of nuclear-missile-armed submarines.

Britain’s inconclusive election on Thursday produced a hung Parliament in which no party holds a majority of seats. The only other two-party pact in Britain since World War II came in 1977, when a weakened Labour government struck an informal deal with the then-Liberal Party lasting less than a year.

Cameron’s right-of-centre Conservatives won 306 of the 650 seats in the House of Commons, 20 short of a majority. Brown’s centre-left Labour won 258 and the centre-left Liberal Democrats took 57 seats.

Labour Party lawmaker, Alistair Darling, Britain’s Treasury chief, said his party would be prepared to offer Clegg a deal on voting reform if the Liberal Democrats’ talks with the Conservatives break down.

“I hope that by the end of today, they will decide whether they can do a deal or not,” Darling said. “We have made it clear that if they can’t, then – of course – we are ready to listen to the Liberals.”

Brown’s Labour party could seek to form a coalition with Clegg’s party, the Scottish Nationalist Party, the Green Party’s single lawmaker and other minor parties.

Despite worries that days of political horse-trading would rattle the financial markets, Britain’s FTSE 100 index soared 248.72 points, or about 4.5 per cent, to 5,371.74 in early trading. World stock markets surged on news of the European Union agreement on a package worth almost $1 trillion for the embattled euro.

But Howard Archer, chief UK and European economist at IHS Global Insight, warned political progress was necessary.

“It is of paramount importance that a credible commitment on how to tackle the dire UK public finances is in place sooner rather than later,” Archer said.

Meanwhile, in a dramatic bid to keep the Labour Party in power, British Prime Minister Gordon Brown has said he will resign by September but first hopes to broker a pact with the third-place Liberal Democrats as part of a coalition government.

Brown said his Labour Party, which came a distant second in Thursday’s national election, would begin a leadership contest to replace him as he focused on talks aimed at breaking Britain’s election deadlock.

“As leader of my party, I must accept that as a judgment on me,” Brown said, referring to Labour’s poor showing in the election.

Brown’s comments came as the Conservatives, who won the most seats in the election but not a majority, were already holding talks with the Liberal Democrats. Some lawmakers said those talks had stalled over differences on key issues, including reform of the voting system.

In a statement outside Downing Street, Brown said Liberal Democrat leader, Clegg, had asked to begin formal coalition talks with the Labour Party and the two could form a centre-left alliance.

Clegg had previously said Brown’s departure would likely be a condition of any deal with Labour.

“There is a progressive majority in Britain and I believe it could be in the interests of the whole country to form a progressive coalition government,” Brown said.

He expressed hope that a new Labour leader would be appointed at the party’s yearly convention in September. Foreign Secretary David Miliband and Education Secretary Ed Balls will likely be leading contenders to succeed Brown.

And in the Philippines, Senator Benigno “Noynoy” Aquino has a sizeable lead over rival, Joseph Estrada in the presidential election, early results have indicated.

The Commission on Elections (Comelec) said Mr. Aquino, son of former President Corazon Aquino, had about 40 per cent of the vote with 38 per cent of ballots counted.

Millions of Filipinos have been voting for a president, vice-president and more than 17,000 other official posts.

Voting was marred by the deaths of at least six people in political violence.

Mr. Estrada had about 25.76 per cent of the vote, said Comelec chair Jose Melo, and property tycoon Manny Villar was trailing in third with just under 14 per cent.

Mr. Melo said about 75 per cent of the more than 50 million registered voters in the country had cast a ballot.

The presidential candidates are vying to replace President Gloria Arroyo, whose second term expires in June.