Labour and Lib Dems renew talks

Formal negotiations between Labour and the Liberal Democrats resumed in the House of Commons today, as the parties struggled to form a viable government five days after the UK general election.

Conservative leader David Cameron insisted this morning that it was “decision time” for the Liberal Democrats, after his party offered an enhanced deal including a referendum on scrapping the first-past-the-post system for Westminster elections.

As he left his home in west London this morning, Mr Cameron said: “I’ve made a very full, very open, very reasonable offer to the Liberal Democrats to deliver that stable government.

“My own Members of Parliament have shown that they are prepared to put aside party interest in the national interest by agreeing a referendum on the Alternative Vote.

“It’s now, I believe, decision time – decision time for the Liberal Democrats - and I hope they make the right decision to give this country the strong, stable government that it badly needs and it badly needs quickly.”

Meanwhile, potential successors to Gordon Brown – who yesterday announced his intention to step down – this morning dodged questions about whether they would be candidates in the race to be Labour leader.

Labour's team at this morning's talks was led by Lord Mandelson, and also featured possible leadership candidates Ed Miliband and Ed Balls alongside Harriet Harman, who last night said she intended to remain deputy leader, and the former Liberal Democrat Lord Adonis.

Speaking outside his London home ahead of the talks, Mr Balls declined to comment on any leadership ambitions.

He told reporters: “We need to take the time to get it right and I am very clear my job is to be there with the whole negotiating team to make sure we protect our manifesto but also the country needs a stable government.”

Senior Lib Dem MP Simon Hughes said he hoped a deal could be struck today, while other party sources described the current 24 hours as “crunch time”.

But Mr Hughes also indicated that the Lib Dems were holding out for further concessions from Labour as the price for a centre-left coalition.

“Labour need to think further and go further before there will be any prospect of any arrangement with them,” he told Sky News.

“I think we know what the Conservatives’ offer is, they’ve made that public, they’ve made public what they are saying about a referendum on a form of change to the voting system.

“They’ve moved positively and constructively on other things, including fair taxation.

“We are waiting really to see whether Labour are willing to make progressive suggestions.”

The Lib Dems entered formal talks with Labour yesterday after Lib Dem MPs signalled they were not happy with all aspects of the Tories’ offer.

Gordon Brown then announced that he was quitting as Labour leader – removing one of the major obstacles to a Lib-Lab alliance.

Until then, the Lib Dems had been concentrating on talks with the Conservative Party.

Some Labour figures – including former home secretaries John Reid and David Blunkett – were this morning agitating against a coalition between their party and the Lib Dems.

A Lib-Lab coalition would still not have a Commons majority and would be forced to rely on other, smaller parties as part of a so-called “rainbow” alliance.

Mr Reid said this would be inherently unstable and warned that voters would punish Labour if they felt it was trying to “cobble something together that patently isn’t in the national interest”.

Mr Blunkett also cautioned that a “coalition of the defeated” would spell electoral disaster for Labour. “If we continue not listening then we will lose very badly at any subsequent general election,” he said.

And he questioned whether the third party was reliable, asking: “Can you trust the Liberal Democrats? They are behaving like every harlot in history.”

Emerging from his house in south west London ahead of the talks this morning, Mr Clegg said he was “as impatient as anyone else to get on with this, to resolve matters one way or another”.

In a brief statement, he told waiting reporters: “We will act, as ever, responsibly. We will act to try to do our bit to create a stable, good government that the British people deserve.

“And I really hope that we will be able to make an announcement so we clear up everything and explain to people exactly what our thinking is as quickly as we possibly can.”