MercoPress. South Atlantic News Agency

PM Brown Steps Down to Open Way for Labour Government with Lib Dems

Foreign Secretary David Miliband; Schools Secretary Ed Balls potential candidates to replace Brown as leader

British Prime Minister Gordon Brown has announced he will step down as Labour leader by September, as his party opens formal talks with the Lib Dems about forming a government.

Gordon Brown's continued presence in Downing Street was seen as harming Labour's chances of reaching a deal. Labour and the Tories are both trying to woo the Lib Dems with promises on electoral reform as the battle to run the country reaches its critical phase. No party won a Commons overall majority at the Thursday's general election.

The Tories—who won the most seats and votes—reacted to Mr. Brown's announcement that he was standing down as Labour leader by making a “final offer” to the Lib Dems of a referendum on changing the voting method to the Alternative Vote (AV) system. Labour is offering to put the AV system into law and then hold a referendum asking voters to approve it.

It is now understood the Lib Dems are seeking a full coalition with either Labour or the Conservatives. A senior Lib Dem source indicated that he expected a resolution to the process of shaping the new government to be reached within the next 24 hours, saying that tomorrow was “crunch time”. A meeting of the party's MPs continued beyond midnight and ended with no firm decisions taken, the BBC understands.

BBC political editor Nick Robinson said Mr. Brown's resignation was an audacious bid by Mr. Brown to keep Labour in power—and himself in power for a limited period—and that Tory MPs would be furious.

In his statement, Mr. Brown said Britain had a “parliamentary and not presidential system” and said there was a “progressive majority” of voters. He said if the national interest could be best served by a coalition between the Lib Dems and Labour he would “discharge that duty to form that government”.

But he added that no party had won an overall majority in the UK general election and, as Labour leader, he had to accept that as a judgement on him. “I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election. I would hope that it would be completed in time for the new leader to be in post by the time of the Labour Party conference [...] I will play no part in that contest; I will back no individual candidate.”

He has urged potential candidates, such as Foreign Secretary David Miliband and Schools Secretary Ed Balls, not to launch their campaigns yet. Harriet Harman has ruled herself out of the race, saying she wants to continue as deputy leader.

Lib Dem leader Nick Clegg had requested formal negotiations with Labour and it was “sensible and in the national interest” to respond positively to the request, Mr. Brown said. It emerged earlier that the Lib Dem negotiating team—who have held days of talks with the Conservatives—had also met senior Labour figures in private.

But it was understood that one of the stumbling blocks to any Labour-Lib Dem deal was Mr. Brown himself. Mr. Clegg said he was “very grateful to David Cameron and his negotiation team” and they had had “very constructive talks” and made a “great deal of progress”.

However, he said they had not “reached a comprehensive partnership agreement for a full Parliament” so far and it was the “responsible thing to do” to open negotiations with the Labour Party on the same basis, while continuing talks with the Tories. “Gordon Brown has taken a difficult personal decision in the national interest,” he said, “and I think without prejudice to the talks that will now happen between Labour and the Liberal Democrats, Gordon Brown's decision is an important element which could help ensure a smooth transition to the stable government that everyone deserves.”