981

May 12 - 18 2010 No. 981

THE WEEKLY WORLD EDITION OF The Daily Telegraph AND The Sunday Telegraph telegraph.co.uk/expat

The Telegraph

Britain in limbo after first hung parliament for 36 years WHICH WAYNOW?

Redcoats march in Red Square

:: ELECTION IN FULL, PAGES 2-7

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By Andrew Porter, Robert Winnett and James Kirkup THE Conservatives and Liberal Democrats sought on Sunday to reassure the financial markets that they were close to agreeing an economic deal that would allow David Cameron to take power.

Three days after Labour lost its Commons majority in the general election, the Tories and Lib Dems were yet to forge an agreement that would remove Gordon Brown from Downing Street.

Senior members of both parties emerged on Sunday night after a weekend of talks and disclosed that a deal with “reduction of the budget deficit at its heart” was being negotiated.

However, with the nation experiencing its first hung parliament for 36 years, there were fears that the power vacuum at the heart of government could scare investors who are already nervous after the crisis in Greece.

These concerns could be made worse by the failure of the parties to come to a formal power-sharing arrangement 72 hours after negotiations began. Nick Clegg was understood to have set a deadline of the end of Monday to see whether a satisfactory deal could be worked out.

The atmosphere of uncertainty was heightened after Mr Brown made a last-ditch attempt to persuade Mr Clegg to enter into a coalition with Labour.

The Prime Minister and the

Lib Dem leader held private talks on Sunday afternoon, while the negotiations between the Tories and Mr Clegg’s party were taking place in a neighbouring building.

Senior Labour figures were said to be contemplating offering a deal to Mr Clegg that would see Mr Brown step down in return for a power-sharing pact.

Mr Cameron and Mr Clegg met in the Commons on Sunday night for their second face-to-face talks of the weekend.

Meanwhile, chief negotiators for the Conservatives and Lib Dems emerged from six hours of Whitehall discussions to announce that further talks would take place.

While admitting that no formal deal had been struck, they expressed hope that they would reach an agreement on a plan to cut Britain’s debts. This plan would focus on proposals to tackle Britain’s deficit, with the aim of soothing market jitters.

In addition, the parties hoped to agree on a cross-party commission to look at voting and political reform. Crucially, it was understood that any recommendations from the commission would be subject to a free Commons vote on whether they should be put before the country in a referendum.

William Hague, the head of the Tory team, explained how the basis of a deal would be rooted in an economic agreement. “We are agreed that a central part of any

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IKOV/EPA

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BRITISH soldiers marched in Red Square for the first time on Sunday, as Russia invited its Second World War allies to take part in 65th anniversary commemorations of its victory over Nazi Germany.

The 76 soldiers from 1st Bn Welsh Guards and the Central Band of the Royal Air Force paraded alongside more than 10,500 Russian troops and detachments from the United States and France.

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The highly symbolic gesture — unthinkable during the Cold War — was part of an attempt by Dmitry Medvedev, the Russian president, to encourage solidarity in the face of common threats such as terrorism.

The parade was the biggest of its kind since the collapse of the Soviet Union in 1991.

SAS defied MoD to save soldiers, page 13

The lack of an overall majority puts Nick Clegg in a powerful position Policy graphic, page 3