Gordon Brown has said he "respects" the right of the Lib Dems to talk to the Tories about forming a government.

But he said he was still PM and, if talks failed, would open negotiations with the Lib Dems, after the election resulted in a hung parliament.

The Tories are expected to get 305 seats, just short of the 326 needed for an outright majority.

Conservative leader David Cameron is to set out his plans to seek to govern "in the national interest" at 1430 BST.

Past practice under Britain's unwritten constitution sees the sitting prime minister in a hung parliament having the right to make the first attempt at forming a ruling coalition.

But Mr Cameron said Mr Brown has "lost his mandate to govern" after the Conservatives won the most votes and the most seats..

Seat predictions

Nick Clegg, leader of the third biggest party the Lib Dems, has said the Tories have the first right to seek to govern.

The BBC projection suggests David Cameron's Conservatives will have 305 seats. There are currently eight Unionists elected in Northern Ireland with one seat left to declare - if they backed Mr Cameron, he could command 313 seats - probably still slightly too few for him to be sure of winning a Queen's Speech.

ELECTION 2010: KEY REPORTS Brown 'proud of Labour's record' Labour loses mandate - Cameron 'Disappointing night' for Lib Dems Lembit Opik loses seat First Minister Robinson loses seat Jacqui Smith loses her seat Caroline Lucas is first Green MP BNP increases votes but no seats Labour retake Blaenau Gwent Election 2010: At-a-glance The Queen's vital role Analysis: Deal or no deal?

Labour is predicted to win 255 seats and the Lib Dems 61, together they would have 316 votes, which even with three SDLP MPs would still leave them at 319 - again a few votes short of a majority.

In Mr Cameron's upcoming statement he is expected to spell out how he would try to form an administration which is "strong and stable with broad support, that acts in the national interest".

It follows comments from Mr Clegg - whose party has done worse than in 2005 despite favourable opinion polls - that he believed the Tories had gained the "first right" to attempt to form a government in the "national interest".

Speaking outside Lib Dem headquarters in London, Nick Clegg said: "It is vital that all parties, all political leaders, act in the national interest and not out of narrow party political advantage."

Electoral reform

He admitted it had been a "disappointing night" for the Lib Dems.

Labour sources told the BBC they believed Mr Clegg had left the door open to a deal with them - as he had also reiterated his belief that the current first-past-the-post voting system was "broken".

BBC political correspondent Carole Walker said Conservative sources were not ruling out electoral reform and could agree to Lib Dem demands for a referendum on voting reform, although they would then campaign for a "no" answer.

Downing Street has authorised the civil service to support other parties in hung parliament negotiations - essentially giving the go-ahead for talks to begin.

In other election night news:

• Northern Ireland's first minister and DUP leader Peter Robinson has been defeated in East Belfast by the Alliance party
• The Greens gained their first MP at Westminster - party leader Caroline Lucas in Brighton Pavillion
• Education secretary Ed Balls hung on in Morley and Outwood by just over 1,000 votes but former Home Secretary Charles Clarke narrowly lost to the Lib Dem candidate in Norwich South
• Jacqui Smith, who stood down as home secretary over her expenses, lost her Redditch seat to the Conservatives but Hazel Blears retained her seat in Salford
• Labour's Margaret Hodge beat the BNP's Nick Griffin in Barking and Dagenham, with a 5% increase in her vote
• Esther Rantzen came fourth in Luton South, which went to the Labour candidate
• Lib Dem frontbencher Lembit Opik has lost his Montgomeryshire seat after suffering a 13.2% swing to the Conservatives
• There were angry scenes and calls for an inquiry after people were turned away from polling stations as long queues formed ahead of the 2200 BST voting deadline.

Business Secretary Lord Mandelson told the BBC: "You could say the electorate have voted for change but what they haven't done is voted decisively in favour of the Conservatives."

Asked if it would be "inconceivable" to have a Labour minority or coalition government which did not have Gordon Brown as prime minister, Lord Mandelson said: "Frankly there are quite a number of permutations."

But he added it was "premature" to "start getting into hypotheses".

Shadow schools secretary Michael Gove said voters would not be "entirely happy" if Mr Brown "after a defeat like this, were to try to cling on and try to form some sort of coalition of the defeated, some sort of alliance of the dispossessed".

He said: "David Cameron has secured a larger number of votes and a larger share of the votes than Tony Blair secured in 2005 when he became prime minister. The logical next step is for David Cameron to form a Conservative-led government."

The Conservatives are predicted to take 298 seats in England, with Labour on 192 and the Lib Dems on 42. The Tories have also made significant gains in Wales - where Labour also regained their former stronghold Blaenau Gwent - but the Lib Dems and Plaid Cymru failed to gain target seats.

But in Scotland the Tories failed to make a significant breakthrough, while the Labour vote held up, with the party re-taking two seats it lost in by-elections - Glasgow East and Dunfermline and West Fife. The SNP and Lib Dems fell short of their targets.

Northern Ireland's First Minister, DUP leader Peter Robinson lost his seat in the first shock result of the night. The other main unionist leader - Sir Reg Empey - was also defeated in South Antrim.

With 17 of 18 Westminster seats declared - the DUP have eight, Sinn Fein have four, the SDLP have three, the Alliance Party has one and one has gone to an independent.

By BBC