London: Senior Labour officials say talks with the third-place Liberal Democrats on forming Britain's next government are unraveling.
Labour's Health Secretary Andy Burnham signaled that his party's chance of sealing a pact were over -- meaning that Conservative Party leader David Cameron could become Britain's prime minister.
Prime Minister Gordon Brown's office declined to confirm that the chances of a deal were dead but said Brown had no plans to tender his government's resignation to Queen Elizabeth II on Tuesday.
Britain's pivotal third party kept its larger suitors -- and the electorate -- hanging Tuesday, opening formal negotiations with Prime Minister Gordon Brown's Labour Party to form a new government even as it continued talks with the rival Conservatives.
Five days after an election that produced no outright winner, the third-placed Liberal Democrats were playing hardball in hopes of extracting maximum concessions in return for propping up a Conservative or Labour administration.
Brown's dramatic decision Monday to announce his impending resignation opened the way for a possible deal with the Liberal Democrats, who had insisted on his removal.
Both of Britain's two main political parties have now offered concessions to the Liberal Democrats on the party's key demand -- electoral reform. Labour, however, has pledged a more extensive offer on changing the voting system, which now penalizes smaller parties. The Conservatives have offered to hold a public referendum on the issue -- but have acknowledged they would campaign against voting reform.
Conservative leader David Cameron appeared miffed Tuesday at the sudden turn of events, which came after the Conservatives and the Liberal Democrats claimed to be making progress Monday in coalition talks.
"It is now, I believe, decision time," Cameron said.
Liberal Democrat leader Nick Clegg and Cameron met face-to-face Tuesday, as Clegg kept all options open in the scramble over who will lead the next British government.
Clegg said he was "as impatient as anyone else" to resolve the political impasse and said he hoped to make an announcement "as quickly as we possibly can."Cameron's Conservatives -- who won the most seats in Parliament in Thursday's national election but fell short of capturing a majority -- have struggled in their attempts to woo Clegg's party.
Though the Liberal Democrats have appeared genuinely open to a deal with the Conservatives, they are more ideologically compatible with Labour.
Brown's offer could give Clegg a viable chance at electoral reform and a role in the British government after years on the political fringe. Yet such a move could be seen by many as an affront to the will of the people, who gave the center-right Conservatives 306 of Parliament's 650 seats -- just short of the 326 needed for a majority. Labour won 258 seats, Liberal Democrats won 57, and smaller parties took the rest.
"There should be a government with a strong and secure majority in the House of Commons," said Conservative negotiator William Hague, Cameron's de facto deputy.
A Labour-Liberal Democrat alliance would be weak because it would need the support of other minor parties in order to rule.
Energy Secretary Ed Miliband, part of Labour's negotiating team, told reporters that the two sides had "good discussions" in three hours of talks Tuesday, but didn't elaborate.
The Liberal Democrats have demanded moving the voting system toward proportional representation, which could greatly increase their future seats in Parliament. In the latest election, Liberal Democrats won almost a quarter of the overall vote but only 9 percent of the seats in Parliament.
Most European countries use proportional-representation rules for elections, allowing parties that win 10 percent of the vote to get about 10 percent of the parliamentary seats.
The system makes coalition governments common, but it also involves longer, more complex vote counts with several rounds of counting.
Close results are much more common with proportional representation than in the single-winner approach observed in Britain, whose system now tends to yield large majorities in Parliament.
Most Conservatives are adamantly against voting reform.
Despite the positive turn of events for Labour, some party supporters admit being uncomfortable with the political wrangling.
Former Home Secretary John Reid said joining up with the Liberal Democrats "would be mutually assured destruction." He told GMTV on Tuesday that while such a deal might keep Labour in power a little while longer, it ran the risk of alienating voters.
"I fail to see how trying to bring together six different parties -- and even then not having a majority -- will bring the degree of stability we need," he said. "It may be perceived as acting in our own self-interest. The public aren't daft."
David Blunkett, a former Labour Cabinet minister, accused Clegg's party of playing off rivals against each other.
"Can you trust the Liberal Democrats? They are behaving like every harlot in history," he said.
It remained unclear Tuesday how many minor parties would offer the needed backing to a Labour-Liberal Democrat alliance. Nigel Dodds of the Democratic Unionist party in Northern Ireland told The Associated Press his bloc was open to offers from both the Conservatives and Labour.
"We would be foolish to show our hand before the major players put their chips on the table," Dodds said.
Amid the political maneuvering, one thing is certain: The career of Brown -- the Treasury chief who waited a decade in the wings for his chance to become prime minister -- is ending.
Brown accepted blame Monday for Labour's loss of 91 seats in last week's election and its failure to win a parliamentary majority. No other party won outright either, resulting in the first "hung Parliament" since 1974.
"As leader of my party, I must accept that that is a judgment on me," Brown said, offering to step down before the Labour Party conference in September.
Financial markets kept a close watch on developments. The British pound, which had traded as low as $1.472 recovered to $1.485 Tuesday afternoon. It had traded at around $1.50 before Brown's resignation announcement Monday.