Throughout the weekend, the tone of much of the commentary surrounding negotiations between Britain's Conservatives and Liberal Democrats regarding the formation of a government in the wake of last Thursday's inconclusive general election, was to the effect that those two parties had passed a point of no return. Therefore, that line of reasoning went, they need to do whatever is necessary to complete a deal, and cannot back down. In part, that was based on the notion that the financial markets would react badly to a failure of their talks.
Now, there are increasing signs that a coalition led by Labour and the Liberal Democrats remains a real possibility. Two developments reinforce that impression:
First, it came to light by this morning that, while Conservative-Liberal Democrat negotiations were ongoing, senior Liberal Democrats also met, secretly, with a high-level group from the Labour Party (which did not include that party's leader, Prime Minister Gordon Brown).
Second, Brown announced today that he will resign as party leader. He suggested a timetable under which his successor would be chosen before Labour's conference next autumn. It has been obvious for some time that Brown could not continue as leader in the long term. But the timing of this announcement appears calculated to jump-start talks between his party and the Liberal Democrats, who have made it clear they do not want to participate in a Brown-led coalition. Brown's statement included a disclosure that "Mr [Nick] Clegg [the Liberal Democrat leader] has just informed me that, while he intends to continue the dialogue he has begun with the Conservatives, he wishes now to take forward formal discussions with the Labour Party."
Policy differences between the Liberal Democrats and the Conservatives constitute the main stumbling block to a deal between those two parties. But, the question of who will be prime minister appears to be the biggest issue standing in the way of a Labour-Liberal Democrat alliance.
Brown had already been criticized for being prime minister for almost three years before facing the voters, as leader, at a general election. If a new Labour leader now becomes prime minister, that situation, viewed by some as undemocratic, will only be prolonged.
Another complication for Labour and the Liberal Democrats is that they don't have enough seats between them to constitute a majority. Therefore, such a coalition would also need the support of Welsh and Scottish nationalists.