LONDON – Britain headed into the weekend Friday without a new leader as the Conservative Party’s David Cameron scrambled to fashion a working government after voters produced this nation’s most divided Parliament in decades.

Final results from Thursday’s election showed Prime Minister Gordon Brown’s Labor Party suffering its worst defeat in 80 years, but Conservative gains fell short of a clear majority, setting up a hung Parliament after 13 years of Labor rule. Cameron and Brown were openly courting coalition deals with Nicholas Clegg, of the third-place Liberal Democrats, in rival bids for power. In a blow to Brown, Clegg signaled his intention to negotiate with the Conservatives first.

The pressure to act fast was becoming intense. The debt emergency in Greece has ignited fears of a new stage in the global financial crisis, and the political stalemate in heavily indebted Britain was heightening concerns that the country could become the next target of investor panic.

On Friday, the pound hit a one-year low against the dollar, dropping even against the battered euro. A key stock index tied to Britain’s domestic economy shed more than 4 percent, and British bonds came under fresh pressure.

Broader financial turmoil could wash ashore next week if the political impasse persists, as some now predict it will, for days.

The most likely of several potential scenarios facing Britain still involves a return to power for the Conservatives — though perhaps temporarily, or with the party in its first coalition since Winston Churchill’s national war cabinet.

Cameron, citing Britain’s economic security, offered a power-sharing deal Friday to the man who had turned the British race upside down: Clegg.

Though the predicted surge of Clegg’s Liberal Democrats did not materialize — they actually lost five seats Thursday — Britain’s third party nevertheless emerged holding the balance of power. Cameron, spoke with Clegg by phone Friday, and they agreed to continue discussions. The two sides met late Friday night for inconclusive initial talks, but it remained unclear whether there was enough common ground for the parties to reach agreement.

Cameron insisted they should try, focusing particularly on the goal of slashing a budget deficit that now rivals Greece’s. “The national interest is clear — the world is looking to Britain for decisive action,” he said at a news conference, echoing Brown’s calls for speed to avoid a market panic. “The new government must grip this deficit and prevent the economic catastrophe that would result by putting off the difficult and the urgent action that needs to be taken.”

The Conservative leader outlined the “big, open and comprehensive” offer he had made, saying he would not bend to the Liberal Democrats’ proposals to rethink Britain’s nuclear deterrent, grant a partial amnesty to illegal immigrants or pursue deeper integration with the European Union. But he acknowledged that the two parties shared some ideas, including on the economy and education. Perhaps most importantly for the Liberal Democrats, Cameron left the door open on electoral reform.

The Liberal Democrats see redrawing the election system as key to their hopes to break the two-party dominance of Labor and Conservatives.

Some Conservatives suggested the party would be willing to sweeten the deal in other ways, such as offering cabinet posts.

“The important thing is to tackle the problems we have with the economy,” John Major, the last Conservative prime minister and a party elder, told the BBC on Friday.

Major, who lost to Tony Blair in 1997, added, “If the price for that is one or two liberals in the cabinet, it’s a price in the national interest that I personally would be prepared to bear.”

Cameron signaled that if he cannot strike a deal, he intends to forge ahead with a minority government. Though common elsewhere in Europe, such governments have proved vulnerable in Britain. The most recent minority government here, in 1974, lasted a grand total of eight months.

“In our adversarial, tribal political system, it would be surprising if a minority Cameron government lasted more than one year, maybe 18 months,” said Tony Travers, professor of politics at the London School of Economics.

Meanwhile Brown, who as the incumbent prime minister has the right to try to form a government first, was not giving up Friday.

Acknowledging, in effect, the magnitude of his party’s defeat, he said that he would allow the Conservatives and Liberal Democrats to seek a workable solution first, but that if they failed, he would seek his own deal with Clegg.

Labor party officials were reportedly already approaching the Liberal Democrat leader Friday night.

“What we have seen are no ordinary election results,” Brown told reporters.


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