Britain's unlikely government takes shape

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Britain woke up to a new political era Wednesday with its first coalition government since the Second World War, an unlikely marriage between the reborn right-wing Conservative Party and the left-leaning Liberal Democrats.

With a handshake, smiles and waves, new Prime Minister David Cameron welcomed his new coalition partner, Deputy Prime Minister Nick Clegg, outside the black door of 10 Downing Street and set off on the business of running the country.

"This is going to be hard and difficult work. A coalition will throw up all sorts of challenges," Cameron said in his first speech as leader. "But I believe together we can provide that strong and stable government that our country needs.

"It will be an administration united behind one key purpose and that is to give our country the strong and stable and determined leadership that we need for the long term."

The new coalition partners said in their first joint press conference their partnership was united by common purpose and will survive for a full five-year term.

"We have a shared agenda and a shared resolve to tackle the challenges our country faces," Clegg said.

"Until today we were rivals, and now we are colleagues,"

The alliance was necessary because no party won a majority of parliamentary seats in last week's national vote. Britons struggling to make ends meet during a punishing recession have been enraged at politicians of all stripes after a damaging lawmakers' expense scandal last year.

Once described as sandal-wearing hippie academics, Clegg's Liberal Democrats have emerged from the political fringe to the top rung of government. The party is expected to gain five Cabinet seats and more than a dozen junior government roles in what will be one of the least experienced governments since Tony Blair's Labour Party won a landslide victory in 1997.

"Of course, we must recognize that all coalitions are about compromise," Cameron wrote in an email to supporters. "This one is no different."

Cameron said the coalition agreement commits the next government to a significantly accelerated reduction in the budget deficit, to cut £6-billion pounds of government waste and to stop an increase in the national insurance tax.

Cameron wrote that the agreement allows Conservatives to move forward on school and welfare reform and rejects Liberal Democrat pledges to get rid of nuclear submarines, offer amnesty to illegal immigrants or handover any additional powers to the European Union.

The government will immediately begin tackling Britain's record £153-billion deficit. It is still unclear whether the Liberal Democrats will back the Conservatives' plan to begin immediate spending cuts - a punishing course of action that isn't likely to win praise from the electorate.

"There is going to be a significant acceleration in the reduction of the structural budget deficit," new finance minister George Osborne told reporters. "We are going to undertake long-term structural reforms of the banking system, of education and of welfare."

Liberal Democrat Vince Cable received a key business brief - an appointment that may spark nervousness in the financial sector. An ex-economist for Royal Dutch Shell, Cable is a fierce critic of banking practices and has demanded action to spur lending.

Bank of England governor Mervyn King gave a strong endorsement to the new government's plans for attacking the deficit, calling it the single most important problem facing the United Kingdom."

"And the agreement that I have been informed about that was been reached between the Conservatives and the Liberal Democrats is a very strong and powerful agreement to reduce that deficit and to take more action," King said.

One of the first calls of congratulation to the new prime minister came from President Barack Obama, an acknowledgment of Britain's most important bilateral relationship. Obama invited Cameron to visit Washington this summer.

Both Cameron and Clegg have acknowledged that Labour under Blair was too closely tied to Washington's interests. Both men back the Afghanistan mission, but Cameron hopes to withdraw British troops within five years. Clegg has said he's uneasy at a rising death toll. Leaner coffers may also mean less money to enter foreign-led military operations.

The new foreign secretary, William Hague, told the BBC that the new government wanted a "solid but not slavish relationship" with the United States and described the so-called special relationship between the two countries as being of "huge importance."

"No doubt we will not agree on everything," Hague said of the United States. "But they remain, in intelligence matters, in nuclear matters, in international diplomacy, in what we are doing in Afghanistan, the indispensable partner of this country."

Hague is expected to speak by telephone later to U.S. Secretary of State Hillary Clinton, and soon travel to the United States and Afghanistan.

Relations with European neighbours could also become problematic. Cameron's party is deeply skeptical over co-operation in Europe and has withdrawn from an alliance with the parties of Germany's Angela Merkel and France's Nicolas Sarkozy. Clegg, once a member of the European parliament, has long been pro-European.

Cameron extended his first invitation for formal talks to Sarkozy, who will visit London on June 18. The date is highly symbolic for France as it is the day that Charles de Gaulle launched his appeal from London via the BBC for the French to resist the Germans during World War II.

Cameron also spoke Wednesday with two key new allies, Chinese Premier Wen Jiabao and Indian Prime Minister Manmohan Singh. The new British chief has vowed to build a "new special relationship" with India, believing the country can become a major political and trade partner.

Labour, meanwhile, took steps to regroup, with the manoeuvring under way for the job of party leader. David Miliband, the former foreign secretary, has emerged as a top candidate and has earned the backing of another early favourite, former Home Secretary Alan Johnson.

Brown's deputy Harriet Harman would become interim Labour leader until a formal leadership takes place to select his permanent successor.

The 43-year-old Cameron became Britain's youngest prime minister in almost 200 years - the last was Lord Liverpool at 42 - after cementing a coalition deal with the third-place Liberal Democrats. Clegg and four other Liberal Democrats received Cabinet posts. A number of other Liberal Democrats would receive junior posts.

The agreement, reached over five sometimes tense days of negotiation, delivered Britain's first coalition government since World War II.

Lawmaker George Osborne was named Treasury chief, the youngest chancellor for more than a century - and, critics say, one of the most inexperienced.

Liberal Democrat negotiator David Laws was appointed as chief secretary to the Treasury - a highly respected role as deputy to Osborne.

Lawmaker Liam Fox will serve as defence secretary, William Hague as foreign secretary, Kenneth Clarke as justice secretary and Theresa May as Home Office secretary.

Other leading positions were being finalized, as were key policy decisions ahead of the presentation of the coalition's first legislative program on May 25.

The coalition has already agreed on a five-year, fixed-term Parliament - the first time Britain has had the date of its next election decided in advance. Both sides have made compromise, and Cameron has promised Clegg a referendum on his key issue: reform of Britain's electoral system aimed at creating a more proportional system.

Brown's resignation Tuesday ends five days of uncertainty after last week's general election left the country with no clear winner. It left Britain with its first so-called hung Parliament since 1974. Britain's Conservatives won the most seats but fell short of a majority, forcing them to bid against the Labour Party for the loyalty of the Lib Dems.

KEY PLAYERS

DAVID CAMERON: Britain's youngest prime minister since Lord Liverpool in 1812, 43-year-old Cameron is both a Conservative Party modernizer and link to the party's old, elitist roots. Educated at Eton - the 19th British prime minister produced by the school - and Oxford University, he worked for the Conservative Party and as a television company publicist before being elected to Parliament in 2001. Elected party leader in 2005 after the Tories' third successive election defeat to Tony Blair's Labour, he deliberately modeled himself on Blair and set out to drag the Conservatives back from the wilderness by moving them to the center and raising their environmental, socially inclusive credentials.

NICK CLEGG: Before this election, many in Britain had never heard of the fresh-faced Liberal Democrat leader. The TV debates made him a political star, and while that did not translate into more seats for the third-placed party, it left Clegg the kingmaker - and Britain's new deputy prime minister. The 43-year-old gets along well with Cameron, who is just three months his senior. The two leaders share a similarly privileged background - Clegg was educated at the prestigious Westminster School, attended Cambridge University, and is the son of a wealthy investment banker. He speaks five languages and worked for the European Commission in Brussels before he became a House of Commons lawmaker in 2005.

GEORGE OSBORNE: At 38, the new Chancellor of the Exchequer is the youngest Treasury chief for more than a century - and, critics say, one of the most inexperienced. The son of a baronet - a hereditary knight - he is the privileged product of private school and Oxford University, where like Cameron before him, he was a member of elitist dining society, the Bullingdon Club. He worked for the Conservative Party before being elected to parliament in 2001 and became a key member of Cameron's "Notting Hill set" of young, metropolitan Tories. Osborne managed Cameron's successful campaign to become Tory leader in 2005, but questions were raised about his judgment in 2008, when he was accused of trying to solicit a donation from a Russian oligarch in breach of funding rules. He was cleared after an investigation.

WILLIAM HAGUE: Foreign Secretary Hague, 49, is one of the Conservatives' most experienced lawmakers, and a former party leader. He first came to national attention as a Thatcherite teenager with a speech to the party conference in 1977, and was elected to Parliament in 1989. Long regarded as a hard right-winger, he was elected party leader after the Tories lost power to Tony Blair in 1997 but was dumped after leading the Tories to another thumping election defeat in 2001. He is regarded as a Euroskeptic - a possible source of friction with his Lib Dem colleagues - but acknowledged as one of the party's most effective orators. Unlike many in Cameron's top team, he comes from northern England, went to a state school and speaks with a regional Yorkshire accent, although he also attended Oxford University.

VINCE CABLE: The 67-year-old Liberal Democrat elder statesman is one of the party's most popular figures, thanks to a knack for plain speaking and some timely warnings about the looming economic crisis. His appointment as business secretary may make some in the financial sector nervous. All eyes will be on his relationship with Osborne, with whom he has publicly disagreed in the past. His hobby is ballroom dancing, a skill he's paraded on British television.

THERESA MAY: The 53-year-old Conservative work and pensions spokeswoman has been promoted to become the second woman to be Home Secretary, after Jacqui Smith. May - who will also serve as Women's Minister - will be the only key woman in Cabinet. Relatively unknown to the British public, May worked in finance and at the Bank of England before she was elected as a lawmaker in 1997. She is the Conservative Party's top female figure and became the party's first female chair in 2002.

Key Players compiled by The Associated Press