Cameron takes helm of coalition government

Britain's new Prime Minister is beginning to form his government, after the Conservatives agreed to a historic coalition with the Liberal Democrats.

David Cameron was installed on a dramatic day that saw Lib Dem leader Nick Clegg announced as his deputy.

It follows the resignation of Labour Prime Minister Gordon Brown on Tuesday, five days after a general election resulted in a hung parliament.

The Tories won the most seats but failed to secure an outright majority and sought a deal with the Lib Dems to govern, ending 13 years of Labour rule.

Mr Clegg arrived at 10 Downing Street on Wednesday where he and Mr Cameron shook hands and waved to photographers.

Four other Lib Dems will take cabinet posts in what is the first coalition government in the United Kingdom for 70 years, the BBC reports.

Mr Cameron vowed to set aside party differences, while Mr Clegg urged doubting Lib Dem voters to "keep faith with us".

The coalition is the first time the Conservatives and Liberal Democrats have had a power-sharing deal at Westminster and the first coalition in the UK of any type since World War II.

At 43, David Cameron becomes Britain's youngest prime minister since 1812. In his first speech as leader, he said there were deep and pressing problems facing Britain and he aimed to form a "proper and full" coalition.

New Zealand Prime Minister John Key, who has offered his congratulations to the new British Prime Minister, says he met Mr Cameron in 2008 when on a trip to Britain and is confident the relationship between the countries will go from strength to strength.

The Tories won the most seats in the UK general election on Thursday, securing 306 of the 649 constituencies contested - while 326 seats are needed for an outright majority.

Labour secured 258 seats, the Lib Dems 57, and other parties 28. The 650th seat has yet to be decided following the death of a candidate after nominations closed.

Listen to Radio New Zealand's London correspondent on Checkpoint ( 5 min 18 sec )

Big spending cuts planned

Details of the coalition are emerging - including a plan for spending cuts of billions of pounds and cuts to public services.

The Liberal Democrats have agreed to an emergency budget within 50 days and to a budget reduction plan including Stg 6 billion in cuts to non-frontline services in 2010/11.

The Conservatives have agreed to the Liberal Democrats' demand for five-year fixed-term parliaments, while the Lib Dems have accepted a cap on non-European immigration and a commitment not to join the euro for the lifetime of the parliament.

Mr Cameron said Britain's best days lie ahead and that he believes deeply in public service.

"And I think the service our country needs right now is to face up to our really big challenges, to confront our problems, to take difficult decisions, to lead people through those difficult decisions so that together we can reach better times ahead."

Emotional farewell from Brown

Gordon Brown said he stepped down as Prime Minister because he was unable to form a government.

In an emotional farewell speech outside No 10 Downing Street, Mr Brown said it had been a privilege to serve.

"Only those who have held the office of Prime Minister can understand the full weight of its responsibilities and its great capacity for good.

"I loved the job for its potential to make this country I love fairer, more tolerant, more green, more democratic, more prosperous and more just. Truly a greater Britain."

Mr Brown will remain as a backbench MP in Parliament.

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