Labour-Lib Dem talks 'constructive' say parties

Labour and Liberal Democrat negotiators have met for their first formal discussions on a possible coalition government, after Prime Minister Gordon Brown sensationally announced he was stepping down as Labour leader.

Both sides described the talks in the House of Commons as "constructive" and it is expected that further discussions on a Lib/Lab pact will take place on Tuesday.

Mr Brown's announcement that Lib Dem leader Nick Clegg had requested formal talks with Labour shook Westminster after four days in which it appeared that the third party was coming close to a deal with Conservatives.

After David Cameron had addressed Conservative MPs on the developments, the Tories came out with a last-ditch bid to win Lib Dems back over to their side, making a final offer of a referendum on the Alternative Vote system to replace first-past-the-post for Westminster elections.

Meanwhile, speculation mounted over the Labour succession, with Foreign Secretary David Miliband, his brother the Energy Secretary Ed Miliband, Home Secretary Alan Johnson, deputy leader Harriet Harman and Schools Secretary Ed Balls all tipped as possible candidates for the leadership.

At a hastily-arranged Cabinet meeting in 10 Downing Street, the potential contenders agreed to hold back from announcing their candidacy until the resolution of talks over the future shape of the government.

David Miliband said: "We agreed as a Cabinet that no potential candidates would launch their campaigns or put forward their names until the vital business of securing a government for this country that can command a majority in the House of Commons is completed.

"Once that is completed then the Labour Party can get on with its business of electing a new leader."