Clegg has played a blinder

Okay, so I would have preferred a Lib-Lab coalition, but the numbers were never really there, the dangers for the Lib Dems in being seen to prop up a defeated party were obvious, and as it became clear today, elements of the Labour Party were not really fully signed up to it anyway, be that out of ideological purism (Diane Abbott), a desire to rub Gordon Brown's nose in it (John Reid, David Blunkett), or positioning for the forthcoming party leadership election (Andy Burnham.)

So instead we have the LibServative option, and on paper, it doesn't seem like a bad outcome. Whatever my own personal feelings, I have said on more than one occasion during this election that the will of the public was probably towards some sort of Con-Lib coalition, and as such I don't think there will be anything like the kind of backlash towards this deal that a Lib-Lab agreement might have attracted.

In terms of policy positions, the initial signs are good, with the Tories have dropped their absurd regressive stance on inheritance tax in favour of the Lib Dem policy of raising thresholds for the worst off, and of course the guarantee of a referendum on the alternative vote which, even if it is likely to be opposed by both main parties, stands a good chance of winning a yes vote from the public.

There also appears to have been a very broad level of agreement between the two parties over civil liberties issues, with the prospect of a 'Freedom Bill' to scrap not only ID cards, but many of Labour's little-used criminal justice measures of the past 13 years.

On personnel, I am obviously delighted to see Nick Clegg as Deputy Prime Minister and it is no less than he deserves for having not only fought a brilliant election campaign, but also for his conduct of the negotiations over the past few days. I am less delighted to see George Osborne move into the Treasury - Ken Clarke, Vince Cable or Phil Hammond would all have been preferable in my eyes - but you can't have everything.

The one outstanding mystery as we approach the early hours surrounds the post of Home Secretary. The absense of any briefing from No 10 clearly indicates that the job is not going to go to Chris Grayling, but may not necessarily mean it is going to Chris Huhne either. Could it be David Davis? If so, that would get the biggest cheer of all from me - the icing on the cake of what looks set to be a liberal government in the classical sense of the term.

Gordon makes the supreme sacrifice. Now bring on Bradshaw

Gordon Brown was always a party man at heart, and his decision to sacrifice himself in order to facilitate Labour's participation in a potential progressive coalition could yet go down as one of the great political game-changers in recent history.

Where Purnell, Blears, Flint, Reid and Co have failed, Nick Clegg has finally succceded, but for once I share Alastair Campbell's view - that Mr Brown never intended to stay long once the election result had become clear, and that far from 'squatting' in No 10, he was simply carrying out his duty to his country - and his Queen - by ensuring the business of government was carried on.

Against the odds, the prospect of a Lib-Lab dream team that can change this country for good is back in play, while the prospect of a 19th old Etonian Prime Minister has at least temporarily receded.

I am sticking by my view that Ben Bradshaw is the man to ultimately take this forward. Although I would be equally happy with Alan Johnson, it may be time to move to a younger generation of political leaders. David Miliband and Ed Balls will of course start favourites, but I think Labour now badly needs to move on from Blairite-Brownite battles and electing either of those two would simply perpetuate them.

Will they do the deal?

Usually, it’s all over bar the shouting by 3am, sometimes even earlier if it is clear that one party has achieved a landslide. But this has been no ordinary election, and this was never going to be an ordinary election night.

With each hour that came and went, the picture appeared to grow more and more confused as those of us watching on telly struggled to make sense of it all.

At various points in the evening, it seemed as though the Tories would either get a small majority, or at the very least come close enough to the winning post to govern as a minority administration.

But in the end, they fell 20 seats short, paving the way for one of the most dramatic days of political wheeler-dealing in recent electoral history and the prospect of the first Lib-Con coalition since the days of David Lloyd George.

David Cameron’s offer of a deal with Nick Clegg which could extent to a formal coalition was nothing if not bold, and demonstrated the Tory leader’s ability to seize the agenda.

As I write, the two men have agreed to explore the idea further, and fresh developments over the course of the weekend seem very likely.

But although Mr Cameron in his St Stephen’s Club speech yesterday was at pains to point out the potential areas of policy agreement with the Lib Dems, he was not entirely convincing on this score.

The Lib Dems’ opposition to the Trident nuclear deterrent and support for electoral reform are likely to be the big sticking points, although on the latter point, it has been suggested that the Tories could concede a referendum in which they would then campaign for a “no” vote.

Of course, it could easily have been very different. Another 30 seats for the Lib Dems and a handful more for Labour, and we could have been talking much more seriously about a Lib-Lab deal instead.

But although Prime Minister Gordon Brown is playing a patient waiting game in Number 10 in the hope that the Clegg-Cameron talks fail, his position is exceptionally weak.

The option of a Lib-Lab pact has least two big drawbacks. Firstly, it would not provide a “strong and stable government,” because the combined forces of the two parties do not in fact add up to a parliamentary majority.

Secondly, both parties performed so poorly in the election that a Lib-Lab alliance would be too easily portrayed by the Tories and the media as a “coalition of losers.”

Mr Brown is pinning his hopes on the fact that he has already offered a referendum on proportional representation, while Mr Cameron has so far talked only of an “all-party inquiry” into voting reform - but this is a chimera.

The fact is, I doubt that an electoral reform referendum could actually be won in those circumstances, as the public would simply see it as two defeated parties teaming up to change the system for their mutual benefit.

In any case, as I wrote last week, a Lib-Con coalition would be the outcome that probably best reflects the will of the public as expressed in this election – a desire for change, coupled with a desire to deny any one party a majority.

There are still formidable obstacles to a deal, not least the views of Mr Clegg’s own MPs. But the public’s evident desire for one is the biggest single reason why it just might happen.

Over to Dave

The result is still inconclusive, but it's already clear that the dream of a progressive-left coalition will have to remain just that for now. Messrs Harman, Mandelson, Johnson and Co have talked all night in language that suggested an attempt would be made to form some sort of Lib-Lab pact, but given how the two parties have performed I think it would be pretty politically unsustainable.

Although it is still possible the Tories may win an overall majority, a minority Tory government remains the likeliest outcome and, whatever the constitutional position, it would now seem sensible for Gordon Brown to put the ball of forming a "stable government" in David Cameron's court.