A last ditch effort by the ruling Labour Party to have an alliance with kingmaker Liberal Democrats failed on Tuesday, paving the way for a Conservative Party led government in Britan the UK.
Labour sources said the formal negotiations between the two parties, which began on Monday, when Gordon Brown announced he would be stepping down as Labour party chief, failed.
But several senior Labour figures have warned against a coalition with the Lib Dems, particularly if the price involves offering them a referendum on changing the voting system to proportional representation.
Meanwhile, Conservative Party leader David Cameron and Lib Dems chief Nick Clegg held discussions in private for an hour. Clegg said the talks had reached a "critical and final phase" and his party would "do our bit to create a stable, good government".
Both Labour and the Conservatives have been trying to woo the Lib Dems with promises on electoral reform to help them form a government, after the Conservatives won the most seats in last Thursday's election but were short of an overall majority.
Labour says if the Lib Dems back them they will put the Alternative Vote System into law and then hold a referendum asking voters if they want a proportional representation voting system -- a key issue for the Lib Dems.
In the May 6 elections that threw up a hung parliament, Conservatives emerged as the single largest party with 306 seats in the 650-member House of Commons. Ruling Labour got 258 seats, while Liberal Democrats won 57 seats.
To form a government, a party needs 326 seats. If Labour and the Lib Dems joined forces, they would still not have an overall majority.
Britain may witness another general election if the major political parties are unable to strike a deal to stitch up a coalition government before May 25.
Earlier in the day, the Conservatives upped their offer to the Lib Dems to a promise of a referendum on reforming the existing voting system.
Cameron said his party had made a "very reasonable" offer to the Lib Dems and had put aside party interest in favour of the national interest. Conservatives so far opposed changing the voting system.
"It's now, I believe, decision time, decision time for the Liberal Democrats and I hope they will make the right decision to give this country the strong, stable government that it badly needs quickly," he said.
