Coalition talks break up: More 'in next 24 hours'

Shadow foreign secretary William Hague emerged from the Cabinet Office to say that they would be briefing their respective leaders on what he described as "very positive and productive" negotiations.

As the meeting broke up Conservative sources disclosed that David Cameron had spoken again by telephone to Nick Clegg following their 70 minute face-to-face talks last night in Whitehall.

Mr Hague told reporters that the two negotiating teams - which are discussing possible terms of co-operation in forming a new government - had had a wide-ranging policy discussion.

"We've had some very positive and productive discussions over many key policy areas," he said.

"The issues we have covered have included political reform, economic issues and the reduction of the deficit, banking reform, civil liberties, environmental issues.

"So we've had good discussions about all of those areas. We intend to meet again over the next 24 hours. We are agreed that a central part of any agreement that we make will be economic stability and a reduction of the budget deficit.

"Each negotiating team is now going to report to our party leaders."

Mr Clegg's chief of staff Danny Alexander emerged a few minutes later, to confirm that they had agreed to have further discussions.

"We're agreed that whatever any agreement made will have deficit reduction and economic stability at its heart," he said.

While the negotiating teams were meeting it emerged that Mr Clegg met Gordon Brown in the Foreign Office.

Labour and Lib Dem sources said that the meeting followed a telephone call between the two men last night and was intended to update each other on the situation.

Both sides described the discussion as "amicable".

It was unclear from the statements whether the Tory-Lib Dem discussions were proceeding on the basis on a full coalition, with Lib Dem ministers sitting around the Cabinet table or some more limited form of co-operation.

Both sides face potential difficulties in selling a deal to their own supporters amid a long history of distrust between the two parties.

Mr Cameron - who will address the Conservative backbench 1922 Committee tomorrow - was holding an "open office" in his rooms in the Commons for Tory MPs and shadow cabinet ministers in an attempt to address their concerns.

Earlier the senior backbencher Graham Brady, who is tipped to be the new chairman of the 1922, warned that there was little enthusiasm among Tory MPs for a full-blown coalition deal with the Lib Dems.

"Certainly my inclination is more towards seeking to operate as a minority government bringing in the support of others where it exists and where there is a consensus that can created," he said.

"I think that is probably, generally, the mood of colleagues."

Conservative former deputy prime minister Lord Heseltine said that there was no need for Mr Cameron to give ground to the Lib Dems on reform of the electoral system.

"I don't think for a minute that David Cameron will concede change to the voting system and I don't think that he needs to," he said.

"His position is much stronger than I think the commentators give credit for. He is going to be prime minister, he controls the parliamentary programme and he controls the electoral timetable."

Senior Lib Dems however were equally adamant that the Conservatives would have to offer more than the committee of inquiry into voting reform, which they are currently proposing, if they wanted a deal.

Former leader Lord Ashdown - who has been advising Mr Clegg - said it was no better than the offer made by Tory Prime Minister Edward Heath to Liberal leader Jeremy Thorpe when he was trying to form a coalition after the 1974 general election.

"We have to assume that was an opening bargaining position," he said.

"I don't believe that anybody can now establish a new government who is deaf to the calls from the British people for reform to our political system and part of that is electoral reform."

Energy spokesman Simon Hughes said the Lib Dems remained "very suspicious" over the Tories' willingness to accept electoral reform and he warned that there could still be "irreconcilable differences" between them.

"The party would have to move significantly if they were to deliver this because they have sounded superficially accommodating but fundamentally pretty unreconstructed. The further you go away from the leadership, the more unreconstructed they are," he said.

"So our party is very suspicious of the Tory Party being able to deliver."

He said that if the talks with the Conservatives did fail, the Lib Dems could still talk to Labour.

"If that isn't possible then of course it is both constitutionally proper but also logical that we would then talk to the other of the three major parties, which is the Labour Party," he said.

"Now, they appear more accommodating on these things. They may be more willing to be helpful."

However Lord Ashdown made clear that the Lib Dems would find it difficult to work with Labour if Gordon Brown remained Prime Minister.

"Amongst his personal qualities is not one that makes him an easy or very able leader of a collegiate-style government," he said.

Mr Brown returned from his constituency in Scotland to Downing Street where he spent much of the afternoon closeted with senior ministers and advisers, including the Business Secretary Lord Mandelson.

Also there were Labour deputy leader Harriet Harman, Energy Secretary Ed Miliband, who wrote the Labour manifesto, and Alastair Campbell, Tony Blair's former communications chief.

He arrived to a growing chorus of calls from Labour MPs warning that his position was untenable.

Graham Stringer - a long-time critic of Mr Brown - became the third Labour MP since the election to publicly call on Mr Brown to stand down, saying he was losing support in the party.

"I've probably spoken to about 15 Labour MPs since the election - some of them who have been very supportive of Gordon over the last three years, some of whom have been closer to my position - and not one of them thinks he should stay on," he said.

Other Labour MPs said that the party needed to accept that it had lost the election and give up its attempts to hang on to power.

Former minister Malcolm Wicks said: "Any prospect of a Labour government staying in power with support from the Liberals in a ragbag coalition depending on assorted nationalists is I think ridiculous.

"We have lost. It would look very, very shabby for us to be seen hanging on to the doorknob of Number 10."

His comments were echoed by another former minister, George Howarth, who said that "the maths" were against Labour being able to form an administration and that Mr Cameron should now be given his chance.

He said: "I think the proper thing to do, in the interests of the country and in the interests of the Labour Party, is for the Conservatives to form a government, for us to be the Opposition - and be in opposition in a constructive way and where anything the Conservative Party puts forward is in our view in the national interest, to support it."