Talks For No 10 Reach Crucial Stage

The third - and possibly final - day of negotiations between the Tories and the Lib Dems has begun.

The Liberal Democrat leader, Nick Clegg, said the parties were "working flat out" to agree on a new government after the UK general election resulted in a hung parliament.

The news came as Gordon Brown was coming under increasing pressure - even from his own side - to stand down as Prime Minister and act in a "dignified" way to ensure the party can regroup in opposition.

Some Labour MPs returning to Westminster today are reported to be demanding Mr Brown accept that he has lost the election and urging him not pursue a "shabby deal" with minority parties in a bid to freeze out the Conservatives.

But Mr Brown ignored his critics and instead held a Cabinet meeting yesterday afternoon after issuing a statement outlining his "resolve" to still serve the country's best interests

George Howarth, a former Labour minister, said Labour did not have a mandate to form a government and should let Conservative boss, David Cameron form a government.

Malcolm Wicks, the Energy Minister, said Mr Brown needed to accept that the public would not accept a "shabby" deal with the Lib Dems and a "ragbag" coalition with other minority parties.

But Mr Brown returned to Downing Street from Scotland and sent a message to Labour party supporters claiming his resolve had not changed.

Labour MPs now believe that under a new leader the party can regroup in time for another election, possibly as early as October.

(BMcC/GK)