Tories, Lib Dems negotiation on; Brown refuses to give up

The Tories and Liberal Democrats edged closer to a deal on coalition formation that would see David Cameron enter Downing Street, even as reports emerged that Premier Gordon Brown had launched a last minute bid to woo kingmaker Nick Clegg to "throw a spanner into the works".

Cameron appeared confident of winning Lib Dem leader Clegg's support after continued negotiations last night for a belt-tightening economic plan to shore up international confidence in Britain.

But though the Lib Dem leader had promised to talk to the Tories first about a power-sharing agreement, details emerged of a clandestine meeting between him and Brown in the Foreign Office.

The rendezvous took place just a few hundred yards from the 'official' talks between the Tory team and their Lib Dem counterparts.

Quoting Labour sources, The Daily Mail claimed that Brown was mounting a desperate eleventh hour bid to "throw a spanner into the works" and sabotage the Tory-Lib Dem talks.

The tabloid claimed that Brown and Clegg had an hour- long discussion and the Labour leader was said to be attempting to trump Cameron's offer by promising to give more on the issue of electoral reform, and to be ready to offer the Lib Dems up to six seats in the Cabinet.

Later Cameron and Clegg met again for 30 minutes.

The horse-trading continued as financial markets were braced for a meltdown as UK was left rudderless, prompting fears that both shares and the pound will take a battering.

The two parties have identified common ground on deficit reduction measures, taxation, civil liberties and the environment but the issue of voting reform - totemic for the Lib Dems - remains a significant stumbling block.

Cameron was warned by Tory Right-wingers not to give too much ground to the Lib Dems or face an open revolt.

Clegg -- under mounting pressure from his anti-Tory Left wing -- was said to have given himself another 24 hours to try to hammer out a coalition agreement with the Tories, before telling them to form a minority government.

Chancellor Alistair Darling, meanwhile, was powerless to resist an EU deal which could leave taxpayers with a 43 billion pound bill to bail out the failing euro.

Tory and Lib Dem negotiating teams met in the Cabinet Office yesterday for six hours of talks over how to end the political deadlock hanging over Britain following the first hung parliament in 36 years.

During the negotiation, Shadow foreign secretary of Conservative party William Hague and Chris Huhne for the Lib Dems attempted to thrash out a deal that will determine Britain's future.