Lib Dems in talks with Tories

The Liberal Democrats are locked in talks with the Conservatives over the possibility of forming a coalition Government.

A Lib Dem spokesman confirmed late on Friday that negotiating teams from the two parties had met for just over an hour.

"They had a discussion and they agreed that future meetings will take place," a spokesman said.

Tory leader Cameron said he was ready to head a minority Conservative administration on a "confidence and supply" agreement, under which smaller parties committed themselves not to bring the government down in return for assurances on key policy areas.

But he made clear he would prefer a "stronger, more stable, more collaborative" arrangement which would enable the country to have a settled government at a time of grave economic difficulties.

The Tory leader earlier signalled his readiness to drive through Lib Dem priorities, including scrapping ID cards. But unlike Labour's Gordon Brown, he has not offered to instigate wholesale electoral reform - a key Lib Dem demand.

Shadow foreign secretary William Hague - Mr Cameron's effective deputy - made clear that the Tory leader was ready to consider anything from an informal agreement on co-operation to a fully-fledged coalition with places at the Cabinet table for Liberal Democrats.