After a marathon talks session lasting more than six and a half hours, the two parties' negotiating teams left the Cabinet Office saying they would meet again within the next 24 hours.
Following their discussions, Mr Cameron and Nick Clegg then held their second face-to-face meeting in 24 hours, seeing each other this time in the Commons.
But on another day of drama and intrigue at Westminster, it appeared Gordon Brown had still not given up his faint hopes of hanging onto power, slipping out of No 10 for a secret meeting with Mr Clegg.
The main focus however was on the meeting between the Conservative and Lib Dem negotiators. As they left to brief their respective leaders, neither side was giving much away about the discussions.
In comments apparently designed to reassure the financial markets, Mr Clegg's chief of staff Danny Alexander stressed that the centrepiece of any deal would be a plan to tackle Britain's record £163 billion deficit.
"Any agreement made will have deficit reduction and a credible plan for controlling economic stability at its heart," he said.
For the Tories, shadow foreign secretary William Hague said the discussions had been "very positive and productive" covering a wide range of policy issues.
Neither team would say whether they were looking at a full-scale coalition, with Lib Dem ministers sitting around the Cabinet table, or a more limited deal - possibly one which would allow Mr Cameron to govern as the head of a minority administration.
Mr Hague confirmed that they had also discussed "political reform", but did not go into whether it included the crucial issue of reform of the voting system - a central concern for the Lib Dems.
Following their discussions, Mr Cameron and Nick Clegg then held their second face-to-face meeting in 24 hours, seeing each other this time in the Commons.
But on another day of drama and intrigue at Westminster, it appeared Gordon Brown had still not given up his faint hopes of hanging onto power, slipping out of No 10 for a secret meeting with Mr Clegg.
The main focus however was on the meeting between the Conservative and Lib Dem negotiators. As they left to brief their respective leaders, neither side was giving much away about the discussions.
In comments apparently designed to reassure the financial markets, Mr Clegg's chief of staff Danny Alexander stressed that the centrepiece of any deal would be a plan to tackle Britain's record £163 billion deficit.
"Any agreement made will have deficit reduction and a credible plan for controlling economic stability at its heart," he said.
For the Tories, shadow foreign secretary William Hague said the discussions had been "very positive and productive" covering a wide range of policy issues.
Neither team would say whether they were looking at a full-scale coalition, with Lib Dem ministers sitting around the Cabinet table, or a more limited deal - possibly one which would allow Mr Cameron to govern as the head of a minority administration.
Mr Hague confirmed that they had also discussed "political reform", but did not go into whether it included the crucial issue of reform of the voting system - a central concern for the Lib Dems.
-Yahoo UK News
