Britain's opposition Conservatives won the most seats in parliament on Friday but failed to gain an overall majority, creating uncertainty over who will lead a country facing huge economic problems.

British asset prices crumbled as the prospect of the first inconclusive election result since 1974 unnerved investors already spooked by a global equity market sell-off.

With results in 615 constituencies declared, the Conservatives were on 290 and could not get to the figure of 326 needed for an outright majority in parliament.

Conservative leader David Cameron said the ruling Labour party had “lost its mandate to govern”.

However, Prime Minister Gordon Brown has the right under the constitution to try to form a government first, potentially opening the door to a period of political horse-trading.

Senior Labour minister Peter Mandelson said he did not expect Brown to resign on Friday. He said he was ruling nothing in or out, and he and others in the party appeared to be wooing the centrist Liberal Democrats.

“I don't think it would help matters if he (Brown) were suddenly to step aside,” Mandelson said.

However, Labour, in power since 1997, could struggle to form a coalition with the Lib Dems since their combined forecast seats would still be short of an overall majority.

The Conservatives could seek a pact with smaller parties from Northern Ireland, Scotland or Wales to boost their support.

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