Britain looks set for a hung parliament amid uncertainty whether a swing to the Conservatives is strong enough for a majority, while the biggest loser of the night was the Liberal Democrats.
Many commentators had hoped the Liberal Democrats leader Nick Clegg, could transform the traditional two-party system into a three-way race.
But a surge in his popularity in the lead up to the election has failed to materialise so far in the election results.
Early results show a big swing to the Conservative Party, with more and more seats going their way. But exit polls predicted the conservative lead would not be enough for a majority (326 seats) in the 650-member House of Commons, leading to the prospect of a hung parliament.
There are suggestions that Labour could try and team up with the Liberal Democrats to govern if the exit polls are proved to be accurate.
Cameron: Labour has lost its mandate
The leader of Britain's main opposition Conservatives David Cameron said Friday the ruling Labour party had "lost its mandate" in the general election.
Cameron, battling to end 13 years in opposition and succeed Gordon Brown as prime minister, said Britain needs "new leadership."
"We have to wait for the full results to come out, but I believe it is already clear that the Labour government has lost its mandate to govern our country," Cameron after elections forecast to leave a hung parliament.
"Although there are still many more results to come out, it looks as if the Conservative party is on target to actually win more seats at this election than we've done at any election for perhaps as long as 80 years."
As Cameron was announced as the winner in the Witney seat near Oxford, west of England, he said that Britain wanted a fresh start.
"What is clear from these results is that the country, our country, wants change," Cameron said.
"That change is going to require new leadership and whatever happens tonight, we will stand ready to do all that we can to help bring that leadership, to help bring strong, stable decisive and good government for our country.
"What will guide me in the hours ahead, and perhaps longer than the hours ahead, will be the national interest, to do what is right for our country, to make sure we have that government, we have that stability, we take the right decisions."
Brown vows play his part in 'stable government'
Meanwhile, Prime Minister Gordon Brown vowed to "play my part" in ensuring Britain has a stable post-election government, as Labour ministers talked up a possible deal with the Liberal Democrats Friday.
"My duty to the country coming out of this election is to play my part in Britain having a strong, stable and principled government," said Labour leader Brown, after being re-elected to his Kirkcaldy and Cowdenbeath seat.
Such a government could "lead Britain into sustained economic recovery; and able to implement our commitments to far-reaching reform to our political system, upon which there is a growing consensus in our country," he added.
His comments came as exit polls suggested Britain was heading for its first hung parliament -- where no one party has an overall majority -- for the first time since 1974.
Talks with Lib Dems on the cards
After the polls were released, senior Cabinet ministers talked openly of a possible deal with the Lib Dems to keep the Conservatives out of office.
Peter Mandelson, Brown's de facto deputy, gave the clearest sign yet Labour was mulling a deal.
When asked about whether Labour could form an alliance with the centrist party to stay in power, Mandelson said on Sky News: "You don't have to sound quite so horrified. Obviously we would be prepared to consider that."
Energy Secretary Ed Miliband, seen as one of Brown's closest allies, told Sky News that an alliance between the two parties was possible.
"Clearly, that's one possibility. Those discussions would have to take place between Gordon Brown and Nick Clegg," he said.
If Labour teamed up with the Liberal Democrats, they would still be short of the 326 clear majority but could broker additional support from fringe parties.
