Tories, Lib Dems "close" to deal

A power-sharing deal between the Conservatives and the Liberal Democrats appeared to be close after a series of meetings, including private talks between their leaders David Cameron and Nick Clegg.

The talks reportedly centred around the “nuts and bolts'' of a possible agreement — whether the Liberal Democrats would be part of a Conservative-led government or support it from outside. On their part, the Conservatives said they were willing to offer Cabinet posts to Liberal Democrats with shadow education secretary Michael Gove publicly offering to give up his potential position as Education Secretary to his Liberal Democrat counterpart.

Both sides were reported to be keen to break the deadlock quickly to reassure the markets, jittery over the prospects of a prolonged political uncertainty.

Mr. Clegg said his party was keen to play a “constructive role at a time of great economic certainty'' but made clear that he was not prepared to make too many concessions.

“Throughout … we will continue to be guided by the big changes we want — tax reform, improving education for all children, sorting out the banks and building a new economy from the rubble of the old, and extensive fundamental political reform,” he said.

The main sticking point remained his party's insistence on sweeping electoral reforms, especially its demand for a referendum on proportional representation to replace the first-past-the-post system which it believes is “undemocratic''.

While Liberal Democrat sources indicated that it was not a “deal breaker'', the party was believed to heavily split on the issue.

The Conservatives are opposed to proportional representation but Mr. Cameron was reported to be prepared to make concessions on electoral reforms including some sort of a public ballot on PR.

Labour, meanwhile, reiterated its offer of talks with Liberal Democrats amid hints that the party was not averse to replacing Gordon Brown with someone more acceptable to Liberal Democrats. Several Labour backbenchers called for Mr. Brown to step down.