Under pressure to reach an understanding on government formation, the Conservatives and the Liberal Democrats were trying to hammer out a power- sharing deal amidst reports that a decision was expected later today.
Apart from public anxiety over the delay, there is much concern over the impact the hung verdict and subsequent political uncertainty would have on the financial markets.
There are fears that the pound and shares would suffer if a deal was not done by the time markets opened today, but early indications are that the FTSE 100 index of London's leading shares leapt more than 4 per cent, suggesting that traders saw the EU deal over a fund to stop the Greek debt crisis spreading as much more significant than the uncertainty in Britain.
Liberal Democrats leader Nick Clegg asked people to 'bear with us' a bit longer and said all political parties were "working flat out" to find a solution after the May 6 elections resulted in a hung parliament.
Chancellor Alistair Darling, who continues in office until a new government takes over, said he hoped a decision was reached today.
He told the BBC, "I don't think it would do any good to let this process drag on. I understand that the Liberals and the Conservatives are engaged in talks today, I hope by the end of today they will decide whether they can do a deal or not."
According to new guidelines, the formation of the new government should take place by 25 May, the day of the Queen’s Speech to the new House of Commons.
The guidelines have been put in place before the election by cabinet secretary Gus O'Donnell, who anticipated a hung verdict.
The time until May 25 is designed to allow the three main parties to try and reach agreement to see who can form a government.
The new guidelines are designed to try and ensure that the country is not forced to immediately go to the polls again almost in the event of no one party winning an overall Commons majority.
