With 36 seats still to be counted, David Cameron’s Conservatives had secured 289 MPs – making it impossible for them to reach the 326 threshold for an overall majority.
The results set the scene for behind-the-scenes horse-trading possibly stretching into the weekend and beyond, as the parties struggle to form a viable administration.
Gordon Brown returned to 10 Downing Street this morning without any clear indication of whether he will be able to remain there as Prime Minister.
But senior lieutenants indicated that he will not “throw in the towel” until it is clear that he cannot lead an “anti-Conservative progressive majority” in the House of Commons.
With 36 seats left to declare, Labour held 246 seats and the Liberal Democrats 51, indicating that the two parties are unlikely to be able to achieve an absolute majority as a coalition in the Commons unless they can also secure support from smaller parties like the Welsh and Scottish nationalists, the SDLP and the UK’s first Green MP.
Mr Cameron insisted that Labour had “lost its mandate to govern our country”, as his party raced ahead in terms of seats won in the new Parliament.
The Conservatives were on target to gain more seats in this ballot than in any General Election for 80 years, said Mr Cameron after winning his Witney constituency in Oxfordshire.
But Mr Brown insisted: “My duty in all of this is that there be a stable, strong and principled government and to play my part in making that possible.
“I think it is too early to say what the verdict of the people is but it is pretty clear that what the people will want at the end of this election is a government that is strong, stable and principled.”
The Liberal Democrats had a disappointing night, with no sign of the so-called “Cleggmania” prompted by the historic televised leaders’ debates being translated into votes or seats.
Their clearly deflated leader, Nick Clegg, acknowledged: “We simply didn’t achieve what we hoped.”
Mr Clegg was expected to make a statement on his intentions as he returned to the Lib Dems’ Cowley Street HQ in Westminster from his delayed Sheffield count.