LONDON // Britain's two main parties locked horns in a political stand off this morning after an inconclusive election - with Labour's Gordon Brown signalling he would try to form a coalition and Conservative leader David Cameron declaring the prime minister had lost his mandate to govern. Polling stations around the country were overwhelmed by those interested in casting ballots in the most hotly contested election in a generation, but hundreds of people were blocked from voting on Thursday due to problems with Britain's paper ballot system.
Mr Cameron's Conservatives strongly outpolled Labour but were projected to fall short of their goal of winning a majority of seats in parliament and immediately ousting Mr Brown. Labour lost dozens of seats but still thwarted the Conservatives from a victory that only a few months ago had been considered a foregone conclusion. And the third-place Liberal Democrats orchestrated the biggest surprise of the night, failing to capitalise on leader Nick Clegg's stellar TV debate performances to rise out of the party's distant, third-place status.
A period of political wrangling and confusion appears ahead for one of the world's largest economies - a prospect that 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 government spending cuts to slash the country's huge deficit.
Still, Mr Cameron claimed that voters had decisively rejected Labour. "Our country wants change. That change is going to require new leadership," Mr Cameron said early this morning, acknowledging negotiations may be needed to determine who will form the next government. Speaking earlier in Scotland, Mr Brown vowed to "play my part in Britain having a strong, stable" government - the clearest sign yet that he would try to cling to power and seek an alliance with the third-place Liberal Democrats. He also pledged action on election reform - a key demand of his would-be partners.
Official results early today showed the Conservatives overtaking Labour in the number of seats won, 274-226, according to broadcaster ITN, with the Liberal Democrats capturing 47 seats and smaller parties getting 27. An analysis by Britain's main television stations suggested the Conservatives would win 305 of the 650 House of Commons seats, short of the 326 seats needed for a majority. Labour was expected to win 255 seats and the Liberal Democrats 61, far less than had been expected.
Turnout rose to 65.3 per cent of Britain's 45.5 million registered voters in early results, from 61.4 per cent in 2005. In London, bond trading started in the middle of the night - six hours earlier than normal - as traders tried to capitalise on early forecasts. UK government bonds rallied in the hope that the Conservatives might manage to form a government. Anger flared when voters in London, Sheffield, Newcastle and elsewhere complained that they had been blocked from voting - and the head of Britain's Electoral Commission said legal challenges to some ballot results because of blocked votes were likely.
Police had to go to one polling station in East London to quell a sit-in protest by 50 angry residents who were denied the chance to vote. Liz Veitch, in the East London neighbourhood of Hackney, said she'd been frozen out after waiting for more than an hour and a half, with a line still stretching down the street. "There are an awful lot of extremely angry people around here," she said. "It's an absolute scandal."
Crowds tried to block officials from taking the ballot boxes in Sheffield, as officials struggled to cope with staggering turnout in some districts. Electoral Commission chief Jenny Watson acknowledged that Britain's paper voting system had been unable to cope with a surge of voters. "This old clunking Victorian infrastructure" can't handle modern elections, Watson said. Britain has previously tested electronic voting systems, but often run into technical difficulties and found that voters preferred paper ballots.
Even though the Liberal Democrats did not win its expected bounce from Britain's first-ever televised political debates, the contests strongly influenced the campaign. The Conservative Party's deputy chairman, a billionaire who funded a campaign to target vulnerable seats, blamed the three debates for his party's failure to oust Mr Brown. The debates "quite obviously turned everything topsy-turvy," Michael Ashcroft said.
The biggest Labour scalp lost in the election was former British Home Secretary Jacqui Smith, who became tangled in a widespread expenses scandal that enraged voters and sent public trust in British politics to a record low. Mrs Smith was caught attempting to bill the public for adult movies watched by her husband. But Labour won the northern England seat of Rochdale - where last week Mr Brown made the biggest gaffe of the campaign, caught on an open microphone referring to an elderly voter as a "bigoted woman" after she buttonholed him on immigration. Mr Brown later visited her home to apologise.
In the southern England resort town of Brighton, Britain's first ever Green Party lawmaker Caroline Lucas was elected. Conservative leaders were adamant that the results meant Mr Brown must go. "No way this man, who has failed this electoral task, can contemplate forming a government," said Conservative party chairman Eric Pickles. But senior Labour figures lost no time in reaching out to the Liberal Democrats in hopes of blocking Mr Cameron.
Foreign secretary David Miliband said, given the election results, Labour and the Liberal Democrats were "honour bound" to talk to each other. Business secretary Peter Mandelson, also Labour's election chief, noted that in a "hung parliament" - one in which no party has a clear majority of seats - the sitting prime minister is traditionally given the first chance to form a government. Mr Mandelson also backed the Liberal Democrats' call for an end to the existing system in which the number of districts won - not the popular vote - determines who leads the country.
"There has to be electoral reform as a result of this election," Mr Mandelson said. The current system, he said, "is on its last legs." Despite Labour's efforts, Mr Cameron still could have a chance of returning right wing icon Margaret Thatcher's party to power after 13 years in the political wilderness - even though he may have to seek deals with smaller parties. In theory, a majority requires 326 seats. However, in practice Mr Cameron could govern as a minority government with a dozen or so fewer because of ad hoc alliances he could form for key votes, and the fact that some parties would be unlikely to join a discredited Labour camp.
The Conservatives were ousted by Labour under Tony Blair in 1997 after 19 years in power. Three leaders and three successive election defeats later, the party selected Mr Cameron, a fresh-faced, bicycle-riding graduate of Eton and Oxford who promised to modernise its fusty, right-wing image. Under Mr Brown, who took over from Mr Blair three years ago, Britain's once high-flying economy, rooted in world-leading financial services, ran into the country's worst recession in decades. At least 1.3 million people have been laid off and tens of thousands have lost their homes.
Despite the uncertainty over the election result, California Gov Arnold Schwarzenegger - a known supporter of Mr Cameron - said on his Twitter feed he'd already called the Tory leader to congratulate him. "Even though results aren't in we know the Conservatives had a great day," Mr Schwarzenegger wrote. * AP