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Gordon Brown
British Prime Minister, Mr. Gordon Brown, has said he is stepping down as Labour Party leader, as his party opens formal talks with the Liberal Democrats about forming a government, the British Broadcasting Corporation reports.

Brown, who has been prime minister since 2007, said he hoped a successor as Labour leader would be in place by September. The Liberal Democrats have been negotiating for days with the Tories, who won the most seats and votes in the UK election.

Senior Tory, George Osborne, said the Conservatives would offer the Liberal Democrats a referendum on changing the voting system. The BBC reports that the shadow chancellor had said the Tories were making a final offer to the Lib Dems, for a referendum on switching from first-past-the-post to the Alternative Vote system.

Brown's statement will be seen as a move to smooth the way to a deal between Labour and the Liberal Democrats to form a government.

BBC reports that it was an audacious bid by Brown to keep Labour in power, and himself in power for a limited period, and Tory MPs would be furious. It comes after further talks between the Tory and Lib Dem negotiating teams and another meeting between Tory leader David Cameron and Lib Dem leader Nick Clegg.

Clegg's team then talked through options with Lib Dem MPs, who urged them to continue to listen to Labour, while seeking further clarification from the Tories about key areas of policy.

Meanwhile, Cameron met wioth Conservative MPs and the Cabinet in Downing Street on Monday evening. The Conservative leader made no comment as he arrived at a committee room in the House of Commons to address his MPs, to loud applause.

In his statement, Brown said Britain had a 'parliamentary and not presidential system' and said there was a 'progressive majority' of voters. He said if the national interest could be best served by a coalition between the Lib Dems and Labour he would 'discharge that duty to form that government.'

But he added that no party had won an overall majority in the UK general election and, as Labour leader, he had to accept that as a judgment on him.

He said, 'I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election. I would hope that it would be completed in time for the new leader to be in post by the time of the Labour Party conference. I will play no part in that contest, I will back no individual candidate.'

Clegg had requested formal negotiations with Labour and it was 'sensible and in the national interest' to respond positively to the request, Brown said.

He said a 'formal policy negotiation process' would be established. It emerged earlier that the Lib Dem negotiating team, which has held days of talks with the Conservatives, had also met senior Labour figures in private.

But it was understood that one of the stumbling blocks to any Labour-Lib Dem deal was Brown himself. Clegg said he was 'very grateful to David Cameron and his negotiation team' and they had had 'very constructive talks' and made a 'great deal of progress.'