David Cameron and Nick Clegg lead coalition into power
• Tory–Lib Dem coalition takes power after Labour talks fail
• Conservative leader becomes PM after five days of negotiation
• Clegg to be deputy PM with four more Lib Dems in cabinet
Britain took a leap into the political unknown last night when the Conservatives and Liberal Democrats formed the first full coalition government in Britain since 1945, with David Cameron serving as the country's 52nd prime minister and Nick Clegg becoming his deputy.
The ending of Gordon Brown's premiership and 13 years of Labour rule followed the collapse of last-ditch efforts to forge a progressive government of Labour and the Lib Dems, provoking bitter recriminations on both sides over how Clegg's party arrived at the decision to decide to prop up a Tory government on what will be a five year fixed term .
Cameron finally entered Downing Street after seeing the Queen at Buckingham Palace last night – concluding a remarkable five-day political tug of war.
On the steps of Downing Street, Cameron, Britain's youngest prime minister since 1812, said: "This is going to be hard and difficult work. A coalition will throw up all sorts of challenges. But I believe that together we can provide that strong and stable government that our country needs."
The deal with the Lib Dems, ensuring a 77-seat majority, was finally agreed after Clegg decided he could not create a stable coalition with Labour, partly due to a revolt inside the parliamentary Labour party at the concept of a deal, as well as its likely terms.
If the deal works, it will change the shape of the Conservative party – and if it fails, the Lib Dems could find themselves rubbed out as a progressive force.
The Lib Dems secured five cabinet posts and a commitment to 15 other ministerial jobs across Whitehall. On the Conservative side, George Osborne will be chancellor of the exchequer and William Hague foreign secretary.
Arriving in Downing Street at 8.40pm as prime minister, Cameron looked overawed as he admitted that his new government had "some deep and pressing problems – a huge deficit, deep social problems and a political system in need of reform". He said he and Clegg wanted "to put aside party differences and work hard for the national interest".
With echoes of the US president John Kennedy, he said he wanted to build a society in Britain "in which we do not just ask what are my entitlements, but what are my responsibilities, one where we don't ask just what am I just owed, but more what can I give".
Clegg admitted there may be glitches ahead, promising "we are going to form a new kind of government", adding "it represented the start of the new politics I have always believed in".
In the intense negotiations with the Lib Dems, the Tories agreed to drop their plans to raise the threshold for inheritance tax, but the Lib Dems accepted that spending cuts will start this year as part of an accelerated deficit reduction plan.
Civil liberties laws will be reviewed, including abolition of ID cards and a referendum will be held on the alternative vote electoral system in which Tories could oppose the change. The Tory annual immigration cap will be kept, and extra money for disadvantaged pupils has been agreed. The Tories have insisted that their plans to recognise marriage in the tax system remain, but the Lib Dems will be entitled to abstain on the issue.
Lib Dem MPs and the party's federal executive endorsed at midnight the detailed coalition deal, due to be published today, but after Cameron was installed in Downing Street.
Once the Lib Dem-Con deal was secured, Gordon Brown went to the Queen to tender his resignation.
In a graceful and moving statement, accompanied by his wife and two sons, John and Fraser, Brown told the nation he was leaving a job that was the most important after being a father and husband.
"Only those who have held the office of prime minister can understand the full weight of its responsibilities and its great capacity for good," he said. "I've been privileged to learn much about the very best in human nature, and a fair amount, too, about its frailties, including my own."
Later he told party workers he was resigning immediately as party leader, leaving Harriet Harman in charge.
He told his party: "We know more certainly than ever before that there is a strong progressive majority in Britain, I wish more than I can possibly say that I could mobilise that majority, but I could not – I have to accept and to assert personal responsibility the fault is mine, and I will carry that alone.
"One thing that will not change is that I am Labour and Labour I will always be."
Even before Brown announced he was resigning, the recriminations had started. The Lib Dems rounded on Labour negotiators, accusing them of not being serious in the talks, and preferring opposition as more attractive than the challenges of creating a coalition.
Lord Adonis, the cabinet member most supportive of a deal with the Lib Dems, launched a blistering attack on Clegg. "It is clear from their conduct in recent days that the Lib Dem leadership was dead set on a coalition with the Tories," he said. "They should have been straight about this fact rather than playing silly games with myself, Gordon Brown and others. Nick Clegg's deal with the Conservatives is a matter of choice not necessity."
Barack Obama was among the first of the world leaders to call Cameron after the Tory leader had entered Downing Street.
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