Crunch time in British political talks

Negotiations between the UK political parties over the shape of the next government were reaching a heightened pitch today, with some sources expecting a conclusion before the end of the day.

Labour and Liberal Democrat teams are expected to meet again after commencing formal talks last night on a possible coalition.

And the Lib Dems are also considering a fresh offer from Conservatives of a referendum on the Alternative Vote voting system for Westminster elections in return for a coalition deal which would put David Cameron in 10 Downing Street.

Lib Dem MPs and peers discussed their options for more than two hours in a meeting at the House of Commons that stretched on past midnight.

Speaking as the meeting broke up, party leader Nick Clegg said: “We are keen to settle things as soon as we can. I am as anxious as anyone else.”

Negotiator David Laws described the meeting as “good and extensive” and said MPs and peers would gather again today. And a party spokesman said MPs and peers had “endorsed the strategy set out by Nick Clegg and agreed that current negotiations need to be concluded rapidly to provide stable government that lasts”.

After four days of discussions following the inconclusive General Election, Lib Dems and Tories appeared to be heading towards some sort of agreement yesterday, when Prime Minister Gordon Brown pulled the rug from under his rivals’ feet with a sensational announcement that he was standing down as Labour leader.

Mr Brown revealed he had been approached by Mr Clegg for formal talks over a possible deal with Labour and made clear he was ready to stay on as PM in a power-sharing coalition until a successor as Labour leader could be chosen.

Both Labour and Lib Dems last night described initial talks as “constructive”. One senior Lib Dem source said a decision one way or another could come within 24 hours, describing today as “crunch time”.

Senior MP Simon Hughes said he believed a deal should be possible today. “We are keen to conclude them as soon as is practically possible, and I would imagine that should be possible – should be possible – during the rest of what is now Tuesday,” he said.

He dismissed the notion of a “rainbow coalition” involving nationalists and Greens, saying: “I don’t think rainbow coalition is a phrase that we’d buy.

“There is a conversation with Labour to see if we can deal with Labour, that’s a serious conversation in its own right, and there is a conversation with the Tories to do a deal with the Tories, a serious conversation in its own right - and those are the only two conversations going on, and a deal would be with either of those. And they are both being pursued with equal vigour. There is no favoured deal.”

At a hastily-arranged Cabinet meeting at 10 Downing Street following Mr Brown’s declaration yesterday, potential contenders for the succession agreed that they would not announced their candidacy until the outcome of talks on the shape of the Government were concluded.

Labour’s ruling National Executive Committee will discuss the leadership contest in a scheduled conference call today, but is thought unlikely to make decisions on its process or timetable at this stage.

Harriet Harman said last night she did not intend to stand for the leadership, telling BBC2’s Newsnight: “You can’t run for leader at the same time as being deputy leader. It is my plan to stay deputy leader.”

Others tipped as possible candidates include Foreign Secretary David Miliband, his brother the Energy Secretary Ed Miliband, Schools Secretary Ed Balls, Home Secretary Alan Johnson and Justice Secretary Jack Straw.

A meeting of the Lib Dem parliamentary party at lunchtime yesterday appears to have put the skids under a deal with the Tories, after both sides’ negotiation teams said that progress was made in 90 minutes of discussions yesterday morning.

After Mr Clegg addressed his MPs and peers in the two-and-a-half hour meeting, the party demanded “clarification” from Tories on issues including electoral reform, education funding and fairer taxes before entering into any pact.

Shadow foreign secretary William Hague later revealed that while talks had previously revolved around a “supply and confidence” arrangement under which Lib Dems would not enter a formal coalition but would agree not to bring down a minority Tory administration, Mr Clegg’s party was now insisting on “a coalition with one side or the other”.

He made the dramatic concession of a referendum on AV – something which Labour had previously offered in a bid to woo the Lib Dems.

Under the AV system, voters rate candidates in a single-member constituency in numerical order and votes are redistributed until one candidate has more than 50% support. Liberal Democrats do not regard it as proportional, preferring the Single Transferable Vote system, which would produce a result in line with the proportion of votes cast for each party.