General Election 2010: David Cameron ready for power - but Scotland stays loyal to Labour

Following an extraordinary election night, where the national campaign was trumped by local factors, Mr Cameron claimed that Gordon Brown's government "has lost its mandate to govern our country".

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But, buoyed by overwhelming support in Scotland, Mr Brown was flying back to London, amid claims that talks between Labour and the Liberal Democrats on forming a coalition had already begun.

Sources close to the Prime Minister confirmed he now wanted to create a Labour-Lib Dem government, so long as the arithmetic added up.

With numerous seats unlikely to be declared until well into today, Britain now looks set for a period of uncertainty.

Mr Cameron – still seen as the man most likely to form the next UK government – also alluded to the confused picture, saying that "in the hours ahead, perhaps longer", he would put the national interest before anything.

The fluctuating mood of the nation was best exemplified in Scotland, where Labour bucked the national trend of Tory gains to hold and even extend their lead in several seats.

The SNP, Lib Dems and Conservatives were unable to make any appreciable gains against Labour north of the Border, with Alex Salmond conceding he had been unable to break down the Labour vote as he hoped.

Scottish Labour were left to celebrate a night when, they claimed, their core vote had returned to back them, following defeat at the Scottish Parliament elections in 2007.

An extraordinary evening began with the Tories predicting a clear victory as exit polls suggested they were on course to become the largest party.

Labour and Tory insiders both said they believed the poll had underplayed the Tory lead, with Labour MPs privately declaring that Mr Brown would have to resign this morning.

But as the night wore on, the Conservatives failed to pick up some of the key marginal seats they had targeted. However, these were offset by some spectacular gains, mostly in the south of England. Consequently, Mr Cameron's chances of winning an overall majority – and thereby ensuring he becomes prime minister today – were still unclear last night.

Speaking after the count in his constituency, Witney, Mr Cameron said: "I believe it is already clear that the Labour government has lost its mandate to govern our country. Although there are still many more results to come out, it looks as if the Conservative Party is on target to win more seats than we have done at any election for perhaps as long as 80 years."

He added: "Whatever happens tonight we will stand ready to do all that we can to help bring that leadership, to help bring strong, stable, decisive and good government for our country."

Earlier, Mr Brown had declared: "My duty to the country, coming out of this election, is to play my part in Britain having a strong, stable and principled government."

Downing Street sources had made it clear before he spoke that Mr Brown would seek to form a coalition government with the Liberal Democrats, if the numbers were in his favour.

Scottish Secretary Jim Murphy claimed: "I think all options are still open, including for example a Labour-Liberal coalition."

Home Secretary Alan Johnson admitted: "The Tories seem to have done very well. I have no problems with deals or coalitions, but it has to be in the right circumstances and we have to respect the will of the people."

But that prompted an angry reaction from the Tories with shadow chancellor George Osborne, warning Mr Brown to "get real" and quit.

He added: "They (Labour] have been rejected by the British people and we now need a change of government."

He claimed that any attempt by Labour and the Lib Dems to stitch together a deal would "shock" voters.

Conservative Party chairman Eric Pickles added: "There isn't a possibility of them (Labour] being able to put together an administration that would be able to last the lifetime of a parliament."

Even some Labour MPs admitted that the game might be up.

Former home secretary David Blunkett said: "My instinct is that regrettably we have lost the election. We should now go for uniting the anti-Conservative forces, if we are in a position, in a way that minimises the damage they can do to the economy, social policy and the wellbeing of the people who voted for us."

Labour's candidate in Glasgow South, Tom Harris, said: "It is early to say at the moment but I cannot see how Labour can stay in government."

The uncertainty was reflected in the currency markets. Sterling rallied initially, in the belief that the Tories would win clearly, before falling back when a hung parliament became a more likely result.

All eyes will be on the Lib Dems today, and their potential to act as kingmakers.

The Tories said the Lib Dems could not back Mr Brown as Nick Clegg had already said that the party with the most seats and most votes – almost certainly the Tories – should be given the chance to govern.

However, the LibDems were having to focus on a potentially devastating evening of their own, with few of the gains that had been predicted following Mr Clegg's successful appearances in the leaders' debates. The party notably failed to take its key target seat, Guildford, from the Conservatives.

However, the Conservative camp was making it clear last night that, even if he fell short of an outright majority of 326, Mr Cameron would, if given the chance, press ahead with plans to form a government without help from the Lib Dems.

The result night caps one of the most exciting election campaigns in recent history which has captured the public's imagination. However, there was growing anger as it emerged that voters were turned away from polling stations across the country as lengthy queues formed.

Mr Clegg appeared in person to apologise to voters in Sheffield who had been locked out at 10pm, unable to vote.

It now appears certain that there will be some appeals to results in the coming days, in scenes of chaos reminiscent of the 2007 Holyrood election.

With half of the seats declared last night, turnout was running at around 64 per cent, up on 2001 and 2005, but well below the numbers who turned out to vote in 1992 and 1997.

Labour's election co-ordinartor, Douglas Alexander, hailed the party's successes in Scotland, and claimed that the SNP was "suffering from an incumbency factor".

He added: "Whether it is their failure to deliver in Holyrood or their failure to deliver in local government, it's a very bad night for the SNP.

However, an SNP spokesman said: "This is a strong performance with our vote increasing in key seats across the country."

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