LONDON — Conservative leader David Cameron claimed the right to govern Britain on Friday, asking the center-left Liberal Democrats to join him in forming a government and attempting to calm financial markets spooked by an unresolved election.
Cameron's Tories won the most seats in Britain's indecisive election but did not take enough seats to form a majority, prompting a competition with Prime Minister Gordon Brown's Labour party for support from the third-place Liberal Democrats.
"I want to make a big, open and comprehensive offer to the Liberal Democrats," Cameron said.
He told reporters a stable government was needed quickly to calm markets and said the Tories would promise to implement parts of Liberal Democratic election manifesto — but stopped short of offering to fulfill their demand of electoral reform.
Cameron offered the party, and their leader Nick Clegg, an all-party committee of inquiry to examine the issue.
Brown went further in a similar public approach to the Liberal Democrats, saying he agreed with their demands
"My view is clear — there needs to be immediate legislation on this to begin to restore the public trust in politics and to improve Parliament's standing and reputation, a fairer voting system is central," Brown said in comments clearly aimed at the third-place party.
Clegg did not immediately respond in public but said earlier that the party that had gained the most seats and the most votes — the Conservatives — should have "the first right to seek to govern."
Labour came second in Thursday's vote, which for the first time since the 1970s produced no outright winner. The Conservatives gained the largest number of seats but fell short of the parliamentary majority needed to govern alone.
With five seats left to report, the Conservatives had 36 percent support, compared to 29 percent for Labour and 23 percent for the Liberal Democrats.
As sitting prime minister, Brown would traditionally be given the first chance to put together a government. His left-of-center Labour Party is seen as a more natural coalition fit with the Liberal Democrats.
Many of the Conservative party's old guard distrust the Liberal Democrats' pro-European leanings and fiercely oppose its call for proportional representation, which would make it hard for any single party to hold power alone — effectively shutting out the Conservatives indefinitely.
"The Tories would fight it (electoral reform) tooth and nail," said Bill Jones, professor of politics at Liverpool Hope University. "It's like asking a turkey to vote for Christmas."
Labour is much more amenable to demands for electoral reform, but even a deal with the Liberal Democrats would leave them a few seats short of a majority, meaning they would have to turn to Scottish and Welsh nationalists for further support.
Scottish national party leader Alex Salmond, whose party won six seats, said he had already been invited to talks with Brown.
"Fate seems to have dealt us a mighty hand between ourselves and (Welsh nationalists) Plaid Cymru," Salmond told the BBC.
Days, and possibly weeks, of political horse-trading could lie ahead — a prospect that gave the financial markets jitters.
As the pound and the FTSE-100 index fell sharply, pressure mounted for a quick solution.
"A decision would have to be made very quickly," said Victoria Honeyman, a lecturer in politics at the University of Leeds,
She predicted that some sort of statement would have to be made before Monday when the markets reopen.
"There's a limit to how long can that this go on," she said. "The pound will start to crash."
Talks were expected to begin between political players Friday, aided by civil service guidelines detailing how the process should unfold.
Although Britain has no written constitution, senior civil servants have been preparing furiously to lay out the rules and avoid market-rattling uncertainty in the event of a so-called hung parliament, a result in which no party secures a majority. The last time a British election produced such a result was in 1974.
A period of political wrangling and confusion in one of the world's largest economies could unsettle global markets already reeling from the Greek debt crisis and fears of wider debt contagion in Europe. Britain's budget deficit is set to eclipse even that of Greece next year, and whoever winds up in power faces the daunting challenge of introducing big government spending cuts to slash the country's huge deficit.
In London, bond trading started in the middle of the night — six hours earlier than normal — as traders tried to make sense of the election results. Britain's main stock index and the pound fell Friday as investors reacted to the inconclusive result against a backdrop of global market turbulence.
In the first minute of trading, the FTSE 100 share index was down 1.3 percent at 5,193 before rallying slightly above 5,200. The British pound traded as low as $1.46589 by early afternoon, down from $1.51 less than 24 hours earlier.