When those talks broke up, negotiators from both sides said they were pleased with progress.

However, the proposals were put to the 57 Liberal Democrat members of parliament (MPs) in the early afternoon of Monday, and it was there that they came unstuck and the expected announcement that an agreement had been reached in principle would not be made.

One of the negotiators, David Laws, told the press after the meeting that his party would "continue to listen to Labor" and that it wanted "to get clarification on a few important points" from the Conservatives.

He added: "What we are seeking to do is to make sure that we get a government which is not only going to be stable in the national interest so that it can deliver and meet the very difficult challenges that there presently are both in relation to political reform and also in relation to the economic situation.

British General elections

"Although we are very, very conscious of the need to reach decisions quickly -- and that was a clear decision of the parliamentary party today -- we also want to make sure that we get these matters right and this discussion is dependent not only on the Liberal Democrat party, but also on the proposals and discussions that are ongoing with the Conservative party, and the representations that are, frankly, being made by Labor."

The Conservatives, the main opposition party for the past 13 years, won 10.6 million votes and 307 seats in last Thursday's general election, short of the 326 seats in the House of Commons they need to form a majority government.

The ruling Labor party, under Brown, suffered a decisive rejection from the voters with 8.6 million votes, losing 91 seats and finishing on 258 seats.

Both parties need the support of the Liberal Democrats, who got 6.8 million votes and 57 seats, to form a government.

Clegg said last Friday that he would turn first to the Conservatives, because they had won the most seats and votes.

Saturday saw talks commence between high-ranking teams from both sides in the morning. In the afternoon Clegg met his 57 members of parliament, then the leaders from among that group in his shadow government team, and then the Federal Executive of his party to win their support for his approach.