Gordon Brown mounted a secret last-ditch attempt to cling to power last night as the Tories and Lib Dems edged closer to a deal that will see David Cameron enter Downing Street.
The Tory leader appeared confident of winning Nick Clegg's support for a belt-tightening economic plan to shore up international confidence in Britain.
There is a chance an agreement could be struck today with talks set to resume at 10am this morning and the Lib Dem leader due to meet with his MPs in the Commons at 1pm.
Mr Cameron, as he left home this morning on his way to meet his team in Whitehall before the latest round of negotiations, was upbeat. 'I am always positive,' he said.
He will gather his shadow cabinet for a meeting at around 4pm and then address the party's MPs at 6pm.
So far, the markets - buoyed by a bailout of Greece finally being agreed by EU finance chiefs - seem prepared to give the two parties breathing space to hammer out a satisfactory arrangement.
The FTSE-100, which saw losses of £35billion on Friday at the end of its worst week for more than a year, soared by almost 3 per cent on opening this morning after the weekend's crunch EU summit finally bore fruit.
But if the Con-Lib negotiations falter, and the political chaos lasts more than another couple of days, there could be fresh investor panic.
Alistair Darling said today: 'For my part, I don't think it will do any good to let this process drag on. I understand that the Liberals and the Conservatives are engaged in talks today.
'I hope that by the end of today they will decide whether they can do a deal or not. We have made it clear that if they can't then, of course, we are ready to listen to the Liberals.'