Conservative leader David Cameron became Britain's youngest prime minister in almost 200 years Tuesday after Gordon Brown stepped down and ended 13 years of Labor government.
Cameron said he aims to form a full coalition government with the third-place Liberal Democrats after his Conservative Party won the most seats but did not get a majority in Britain national election last week.
According to an announcement issued on Tuesday Liberal Democrat leader Nick Clegg would become deputy prime minister - a rarely awarded and prestigious post - after days of hard bargaining with his former political rivals. Four other Liberal Democrats also received Cabinet posts.
Cameron said it would be "hard and difficult work" to govern as a coalition but added that Britain had serious economic issues to tackle. Cameron visited Buckingham Palace and was asked to form a government by Queen Elizabeth II less than an hour after Brown tendered his resignation to the monarch.
Cameron and Clegg's pact would be the first coalition government since World War II.
Arriving at London's Downing Street hand in hand with his wife Samantha, Cameron said he believed that Britain's "best days lie ahead."
Hundreds of onlookers, many of them booing, crowded the gates of Downing Street to watch on, as Cameron swept into his new home less than 90 minutes after an emotional Brown had made a farewell address.
"We have some deep and pressing problems — a huge deficit, deep social problems, a political system in need of reform," Cameron said. "For those reasons, I aim to form a proper and full coalition between the Conservatives and the Liberal Democrats."
Negotiators from both parties were finalizing the agreement as Brown and Cameron met with the queen, and holding meetings with their lawmakers to ratify the highly unusual deal. Neither side was expected to thwart the plan to govern in a coalition deal.
David Cameron and wife Samantha in front of 10 Downing Street (Photo: Reuters)
Both parties were keeping the full list of Cabinet ministers and policies close to the vest but British media were speculating on a series of unconfirmed selections for Cabinet posts. The only position that the party would confirm was that of Conservative lawmaker George Osborne as Treasury chief.
"Nick Clegg and I are both political leaders who want to put aside party differences and work hard for the common good and for the national interest," Cameron said.
President Barack Obama telephoned Cameron but there was no immediate word from the White House on what Obama said during the call from the Oval Office.
The high political drama came as the Conservative and Liberal Democrat parties hammered out details of a coalition deal after the country's inconclusive election.
Standing outside 10 Downing St. alongside his wife Sarah, Brown spoke in strained tones as he wished Cameron well.
"Only those who have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good."
Brown said he had "loved the job, not for its prestige, its titles and its ceremony, which I do not love at all."
"No, I loved the job for its potential to make this country I love fairer, more tolerant, more green, more democratic, more prosperous, more just — truly a greater Britain."
After his brief statement, the 59-year-old Brown walked hand-in-hand with his wife and young sons John and Fraser down Downing Street, where a car waited to take him to the palace.
Brown spent about 15 minutes inside the palace and was then driven away — no longer Britain's leader. Minutes later he arrived at Labor Party headquarters, where he was greeted warmly by cheering staffers.
Brown told party staff that his deputy Harriet Harman would become interim Labor leader until a formal leadership takes place to select his permanent successor.
The Queen greets David Cameron (Photo: AP)
Brown's resignation ends five days of uncertainty after last week's general election left the country with no clear winner. It left Britain with its first so-called hung Parliament since 1974. Britain's Conservatives won the most seats but fell short of a majority, forcing them to bid against the Labor Party for the loyalty of the Lib Dems.
Brown's departure leaves the path clear for a Conservative-Lib Dem coalition.
Teams from the two parties met for several hours Tuesday, but emerged without confirming whether a deal had been struck. Conservative deputy chief William Hague said only that the atmosphere had been "positive."
Rank-and-file members of the two parties were meeting to discuss the coalition deal later Tuesday and, though there are likely to be some objections, it is regarded as improbable that either side would thwart the pact.
Liberal Democrat Treasury spokesman Vince Cable said the details of a deal were being worked on, but he would be "very surprised" if an agreement was announced before Wednesday.
"Nothing has been formally agreed," he said. "There has been a lot of progress.
"The details are currently in the process of being sorted."
Clegg's Liberal Democrats have a more complex process, and may need to hold a meeting of around 200-300 grass roots members to formally ratify the coalition. Their joint government needs to be in place in time to draft a legislative program that will be announced in Parliament on May 25.
Brown's departure follows three successive election victories for his center-left Labor Party, all of which were won by his predecessor Tony Blair, who ousted the Conservatives in 1997.