After 13 years... Labour's sad goodbye to No 10 - VIDEO

Mr Brown said it had been "a privilege to serve" and wished his successor well.

Mr Brown, his voice cracking with emotion, also said he was resigning immediately as Labour leader.

Mr Brown then left Downing Street for Buckingham Palace holding hands with his wife Sarah and sons John and Fraser. He has been Prime Minister for less than three years.

With his wife Sarah standing by his side on the steps of No 10, he said: "My constitutional duty is to ensure that a government can be formed after last week's general election.

"I have informed the Queen's private secretary that it is my intention to tender my resignation to the Queen.

"If the Queen accepts, I shall advise her to invite the Leader of the Opposition to seek to form a government."

Mr Brown said: "I wish the next prime minister well as he makes the important choices for the future.

"Only those who have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good.

"I have been privileged to learn much about the very best in human nature and a fair amount too about its frailties - including my own."

Mr Brown was taken directly to Buckingham Palace, where he was greeted and taken inside for his audience with the Queen.

Mr Brown said he had "loved the job, not for its prestige, its titles and its ceremony, which I do not love at all.

"No, I loved the job for its potential to make this country I love fairer, more tolerant, more green, more democratic, more prosperous, more just - truly a greater Britain."

He also paid tribute to the armed forces, saying: "Now that the political season is over, let me stress that having shaken their hands and looked into their eyes, our troops represent all that is best in our country and I will never forget all those who have died in honour and whose families today live in grief."

He paid tribute to colleagues and staff, who had been "friends as well as brilliant servants of the country".

Minutes after Mr Brown left Downing Street, a few hundred yards away talks ended between Liberal Democrat and Tory negotiators on a future government.

Shadow foreign secretary William Hague said: "We now have some recommendations to take back to David Cameron and our parliamentary colleagues."

Lib Dem leader Nick Clegg's chief of staff Danny Alexander said that the talks had taken place in a "good atmosphere".

Mr Alexander added: "We are returning to report back to Nick Clegg and our parliamentary party."

The talks in the Cabinet Office had lasted five and a half hours.

In his resignation speech, Mr Brown paid tribute to Sarah's "unwavering support and her love" and to his sons - John and Fraser - "for the love they bring to our lives".

He was leaving, he said, "the second most important job I could ever hold" after that of being a husband and father, which he would now "cherish even more".

Concluding "Thank you, and goodbye", he then turned back to the door of No 10 from where the two boys joined the couple, posing for photographs before walking, all holding hands, down the street to cheers.

Mr Brown's dramatic resignation came a day after he announced he would step down as Labour leader in the wake of the party's defeat in last Thursday's General Election.

It appeared overnight that Labour might be able to forge a deal with Liberal Democrats to create a "progressive alliance", but talks this morning broke down after about three hours.

It was later announced that Mr Clegg had been in face-to-face talks with Mr Cameron at the same time as his negotiation team was talking to Labour.

The Lib Dems and Conservatives returned to talks at the Cabinet Office at around 2pm, and as the day wore on it appeared ever more likely that they would reach some sort of deal which would put Mr Cameron in 10 Downing Street at the head of a coalition government.

Mr Brown left the Palace after around 20 minutes and was driven away.

After leaving the Cabinet Office talks, both Mr Hague and Mr Alexander said separately that they were "pleased with our discussions".

Mr Brown has told friends he plans to resign as an MP and quit politics altogether following the dramatic events of the past few days, sources told the Press Association.

Close friends of the former Prime Minister said they expected Mr Brown to concentrate on charity work.

He has no plans to stay in politics or follow Tony Blair's example of taking up lucrative business work, said the sources.

But there was also speculation that Mr Brown will be approached by international finance organisations keen to use his experience.

Mr Brown then made the short journey to Labour Party headquarters, arriving at 7.50pm.

Staff and fellow MPs applauded as he climbed out of the car.

Deputy party leader Harriet Harman, Energy Secretary Ed Miliband, Work and Pensions Secretary Yvette Cooper, Transport Secretary Lord Adonis and International Development Secretary Douglas Alexander were among those who greeted him.

Ms Cooper hugged Mrs Brown as she followed her husband into the building.

Conservative and Lib Dem negotiating teams had continued their talks in the Cabinet Office this afternoon amid a growing expectation that a deal was in the bag.

Officially, Labour was waiting to hear formally from the Lib Dems that there was no hope of a deal between their two parties before throwing in the towel.

But the mood among ministers was one of resignation that the game was finally up.

Health Secretary Andy Burnham - touted as a possible successor to Mr Brown - was the first Cabinet member to acknowledge publicly that their hopes of retaining power were fading.

"I think we have got to respect the result of the General Election and you cannot get away from the fact that Labour didn't win," he said.

"I would say that clearly the lead option would remain the largest party speaking to the Liberal Democrats."

His comments were echoed by Michael Dugher - a newly elected Labour MP who was an adviser to Mr Brown until the election - who said that the party needed to accept the verdict of the electorate.

"It said that we don't want you to be in government any more, we don't think you deserve a majority in Parliament any more," he said.

"I think that we do need to listen to what the voters said."

A Liberal Democrat spokesman said: "It is clear that the Labour Party never took seriously the prospects of forming a progressive, reforming government with the Liberal Democrats.

"Key members of Labour's negotiating team gave every impression of wanting the process to fail and Labour made no attempt at all to agree a common approach with the Liberal Democrats on issues such as fairer schools funding for the most deprived pupils and taking those on low incomes out of tax.

"It became clear to the Liberal Democrats that certain key Labour Cabinet ministers were determined to undermine any agreement by holding out on policy issues and suggesting that Labour would not deliver on proportional representation and might not marshal the votes to secure even the most modest form of electoral reform.

"It is clear that some people in the Labour Party see opposition as a more attractive alternative to the challenges of creating a progressive, reforming government, not least in the context of a Labour leadership election campaign."

Next page: Full transcript of resignation speech Gordon Brown tendered his resignation as Prime Minister tonight.

He made the announcement in Downing Street accompanied by his wife, Sarah.

Here is a transcript of his resignation speech:

"As you know, the General Election left no party able to command a majority in the House of Commons.

"I said I would do all that I could to ensure a strong, stable and principled government was formed, able to tackle Britain's economic and political challenges effectively.

"My constitutional duty is to make sure that a government can be formed following last Thursday's General Election.

"I have informed the Queen's private secretary that it is my intention to tender my resignation to the Queen.

"In the event that the Queen accepts, I shall advise her to invite the leader of the Opposition to form a government.

"I wish the next prime minister well as he makes the important choices for the future.

"Only those that have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good.

"I have been privileged to learn much about the very best in human nature and a fair amount too about its frailties, including my own.

"Above all, it was a privilege to serve. And yes, I loved the job not for its prestige, its titles and its ceremony - which I do not love at all. No, I loved the job for its potential to make this country I love fairer, more tolerant, more green, more democratic, more prosperous and more just - truly a greater Britain.

"In the face of many challenges in a few short years, challenges up to and including the global financial meltdown, I have always strived to serve, to do my best in the interest of Britain, its values and its people.

"And let me add one thing also. I will always admire the courage I have seen in our armed forces.

"And now that the political season is over, let me stress that having shaken their hands and looked into their eyes, our troops represent all that is best in out country and I will never forget all those who have died in honour and whose families today live in grief.

"My resignation as leader of the Labour Party will take effect immediately. And in this hour I want to thank all my colleagues, ministers, Members of Parliament. And I want to thank above all my staff, who have been friends as well as brilliant servants of the country.

"Above all, I want to thank Sarah for her unwavering support as well as her love, and for her own service to our country.

"I thank my sons John and Fraser for the love and joy they bring to our lives.

"And as I leave the second most important job I could ever hold, I cherish even more the first - as a husband and father.

"Thank you and goodbye."