Britain's under new management
London - Britain woke up to a new political era on Wednesday with the first full coalition government since World War 2 – an unlikely marriage between the Conservative party of right-wing icon Margaret Thatcher and the left-leaning Liberal Democrats.
Details of the coalition alliance were expected to slowly trickle out – the Liberal Democrats have already won several Cabinet seats, but it will be one of the least experienced governments since Tony Blair's Labour Party won its landslide victory in 1997 amid cheers of joy.
Boos greeted Conservative Prime Minister David Cameron as he walked into Downing Street late on Tuesday after Labour's leader Gordon Brown stepped aside.
No party won a majority of parliamentary seats – voters were enraged after a damaging expense scandal last year that tarred lawmakers from all three parties with claims on everything from pornography to chandeliers.
The government will immediately begin tackling Britain's record $236bn 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.
But the change in government could also mean a change for Britain's place on the world stage.
Looser ties with Washington
Both Cameron and Liberal Democrat Deputy Prime Minister Nick Clegg have signalled they favour looser ties to Washington. 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.
Relations with European neighbours could also become problematic.
Cameron's party is deeply sceptical over co-operation in Europe and has withdrawn from an alliance with the parties of Germany's Angela Merkel and France's Nicolas Sarkozy.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.
Once described as sandal-wearing hippie academics, Clegg's Lib Dems emerge from the political fringe to the top rung of government. Among the most visible will be Vince Cable, who will take an as yet unspecified post in charge of Britain's banks, the BBC reported.
Labour, meanwhile, took steps to re-group, with the manoeuvring under way for the job of party leader.
New Labour leader
David Miliband, the foreign secretary, has emerged as a 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 becomes Britain's youngest prime minister in almost 200 years – the last was Lord Liverpool at 42 – and cemented 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 full coalition government since World War 2.
"This is a genuine compromise between the parties," said William Hague, the new foreign secretary.
There are many things the Liberal Democrats have had to swallow that are very difficult for them, just as there are some things – like holding a referendum on a new voting system – that are very difficult for the Conservative Party to accept.
"That means, of course, there will be people in both parties who quietly wish it hadn't happened, I'm sure."
Cameron and Clegg agreed to a pact after the Conservative Party won the most seats in Britain's May 6 national election, but fell short of winning a majority of seats in Parliament.
Cameron's Conservative Party said senior lawmaker George Osborne will serve as Treasury chief, and lawmaker Liam Fox as defence secretary.
Other leading positions were being finalised, as were key policy decision ahead of the presentation of the coalition's first legislative programme 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.
Reform of Britain’s electoral system
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.
"Nick Clegg and I are both political leaders who want to put aside party differences and work hard for the common good and for the national interest," Cameron said on Tuesday.
President Barack Obama, meanwhile, telephoned to congratulate Cameron, and invited him to visit Washington this summer, according to the White House.
Obama told Cameron that he looked forward to meeting at an international economic summit to be held in Canada next month.
Brown's resignation 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.