UK's Gordon Brown to resign as prime minister

The political theater, played out in front of the iconic black door of No 10 Downing Street, comes as David Cameron's Conservatives - which won the most seats in Parliament but fell short of a majority - struggled in their attempts to win over the third-place Liberal Democrats.

Brown's party has been willing to entertain supporting the Liberal Democrats' demand for an overhaul of the voting system toward proportional representation, which would greatly increase that party's future seat tallies. But the evening brought a further twist with a counteroffer from the Conservatives - a referendum on a less dramatic type of electoral reform.

While uncertainty prevails, to the displeasure of the markets, one thing appears certain: The career of Brown - the Treasury chief who waited a decade in the wings for his chance to become prime minister - is winding to an end.

Brown, looking statesmanlike but resigned to political reality, accepted blame for Labour's loss of 91 seats in last week's election and its failure to win a parliamentary majority.

No other party won outright either, resulting in the first "hung Parliament" since 1974 and triggering a frantic scramble between Brown's Labour and the main opposition Conservatives to broker a coalition - or at least an informal partnership - with the Liberal Democrats.

"As leader of my party, I must accept that that is a judgment on me," Brown said, offering to step down before the party conference in September.

Brown said Liberal Democrat leader Nick Clegg had asked to begin formal coalition talks with the Labour Party and said he believed their parties might form a center-left alliance. Clegg had previously suggested Brown's departure would likely be a condition of any deal with Labour.

The Liberal Democrats have seemed genuinely open to a deal with the Conservatives - who are less ideologically compatible with Clegg's party than Labour is - largely out of a sense that Cameron won a moral mandate and supporting him was expected by the nation at a time of economic turmoil.

But Brown's statement appeared to give Clegg's party a viable alternative, and real temptation: join a possibly short-lived alliance, remove the unpopular Brown, and pass electoral reform that could transform their fortunes and even banish the Conservatives to the political wilderness for many years.

Clegg held late night talks with his party's lawmakers to discuss their next move. "We will try to make everything as clear as possible as soon as possible," he said. His party plans a new round of negotiations Tuesday with Brown's Labour.

The day's drama disappointed those hoping for a swift resolution and deepened the post-election limbo that many feared could further undermine confidence in Europe's financial markets. The pound fell nearly 1.5 cents against the dollar after Brown's statement on his future, trading at $1.4866 late Monday.

Belying morning optimism and buoyant statements by party spokesmen, the Liberal Democrats announced by afternoon that they hadn't yet reached an agreement with the Conservatives on education funding, fair taxation and electoral reform. Then came Brown's offer; Kazinform cites China Daily.

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