British Prime Minister Gordon Brown was clinging to power on Friday despite his Labour Party looking set to lose the country's cliffhanger general election.
As vote counting continued, a hung parliament looked to be the most likely outcome, with the Conservatives leading Labour in the race for the most House of Commons seats.
Conservative leader David Cameron insisted Mr Brown had lost his mandate to govern, despite the Tories appearing unlikely to win the 326 seats needed to form a majority government.
But Mr Brown signalled he was prepared to try to form a coalition with the Liberal Democrats in an attempt to keep Labour in power for a record fourth term.
He arrived at 10 Downing Street at after spending the night watching election results from his constituency home in Scotland.
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Before returning to London, Mr Brown said as Labour leader and had a "duty to the country".
"My duty in all of this is that there be a stable, strong and principled government and to play my part in making that possible," he said.
"I think it is too early to say what the verdict of the people is but it is pretty clear that what the people will want at the end of this election is a government that is strong, stable and principled."
Hung Parliament
In the event of a hung parliament, Whitehall rules allow an incumbent prime minister to have the first chance at forming a government with the backing of other parties.
If they fail, the prime minister would resign and the Queen would be free to invite another party to form a government.
Labour sources said it was too early to say exactly what Mr Brown would do, but he was ready to launch into several days of talks with the aim at forming a coalition government.
Alliance possible
Business Secretary Peter Mandelson said Labour would be prepared to consider an alliance with the Lib Dems.
"The electorate have voted for change but what they haven't done is vote decisively in favour of the Conservatives," he told the BBC.
"I am not ruling out or ruling in anything. It is premature to start negotiating."
Lib Dems 'dissapointing'
The Lib Dems and leader Nick Clegg had enjoyed a surge in popular support during the four-week election campaign and even overtaken Labour in some opinion polls.
Mr Clegg described the Lib Dems' performance as "disappointing" amid fears the party would finish with fewer MPs than the 63 it had elected in 2005.
However, he was coy about doing deals with either Labour or the Tories.
"People have voted but no one appears to have won emphatically," he said.
"I really think it would be best for everyone to take a bit of time and see what the final result is and take it from there.
"I think it would be mad for people to rush into decisions that don't stand the test of time."
'Change needed'
Mr Cameron said the election results showed Britain was crying out for change and 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," he told supporters in his constituency of Witney.
"What is clear from these results is that the country, our country, wants change. That change is going to require new leadership.
"I can see also that the Conservative Party is on target to win more seats at this election than we have done at any election in perhaps as long as 80 years."
Meanwhile, the uncertainty surrounding Britain's hung parliament caused the pound to slump to its lowest level against the US dollar in more than a year.
