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Page last updated at 15:19 GMT, Friday, 7 May 2010 16:19 UK

Election analysis: Deal making time - but who and who?

By James Landale
Deputy political editor, BBC News

Nick Clegg, David Cameron, Gordon Brown
The leaders now await the verdict of Britain's electorate

In 1974, Ted Heath famously asked the question: "Who governs Britain?" It is not a bad question to ask the day after the 2010 general election.

The first decision has come from Gordon Brown. Despite losing seats, despite coming second, he has chosen not to resign. Having initially paved the way for cross-party negotiations to begin by allowing civil servants to "support" the Conservatives and Liberal Democrats in any talks they may have, he also made his own pitch to Nick Clegg.

While he respected the Lib Dem leader's decision to speak at first to David Cameron, the prime minister left the door open to talks, speaking of the common ground between the party and Labour.

Of course, if Mr Brown had resigned, Mr Cameron would have gone directly to Buckingham Palace and a minority government would have been formed.

The prime minister's aides and ministers are making it very clear that they believe some kind of deal with the Lib Dems is possible, a kind of anti-Tory "progressive alliance" with an agreement on electoral reform at its heart.

The ball thus moves to Nick Clegg's side of the court. He says he will stick by his campaign promise to allow the party with the most seats and votes - thus the Conservatives - to have the first right to seek to form a government.

He says: "It is now for the Conservative Party to prove that it is capable of seeking to govern in the national interest."

In other words, what are you offering, David Cameron?

Mr Clegg is not saying that he will never talk to Labour or do a deal with them, just that he will talk to the Tories first. He will listen to what Mr Cameron offers him and take it to his party tomorrow. He will not move fast.

The Lib Dems will not want to do much with the Tories unless proportional representation is on the table. Remember that Mr Clegg will have to take his party with him; he cannot operate alone in these talks.

Legitimacy question

David Cameron spoke on Friday of some policies that cross over - both parties for example want a so-called pupils' premium to support educationally deprived children.

But the Tory leader will have to tread carefully over any discussions about proportional representation (PR).

Many Tory MPs would strongly oppose any deal that paves the way for PR. So Mr Cameron gave the Lib Dems the carefully-worded offer of an "all party committee of inquiry on political and electoral reform".

Even talking about such reforms may be a step too far for some Tories. One told me: "The party offering PR has just come third in this election. Why should we agree to something the voters have rejected."

Some Tories might, however, tolerate fixed-term parliaments, another long-term aim of the Lib Dems.

But as Mr Cameron himself admitted on Friday afternoon, the two parties disagree on Europe and defence - in pretty fundamental ways.

If the Lib Dems and Tories do secure a deal, Mr Brown would have to resign. He would know that in a few weeks he would not be able to command the confidence of the House of Commons. But if there is no deal, then the Lib Dems and Labour would talk.

Any Lib Dem-Labour deal would depend entirely on legitimacy. How could they sell a government to voters that would not be seen as a coalition of losers?

They would argue that there is a majority opposed to the Tories and that they - as a coalition - have a mandate. But this would be a hard sell. As my taxi driver said this morning: "So the Tories got most votes and most seats. So why haven't they won?"

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