BRITAIN is waking up to a new coalition government under David Cameron.

IN an emotional speech outside No 10 last night, Gordon Brown resigned as Prime Minister, saying he would tell the Queen to invite David Cameron to form a government.

He spoke of his love for the job of Prime Minster "not for its prestige or its trappings, which I do not love at all, but for its potential to change the country which I love," and paid tribute to his wife, Sarah, and their children.

After the statement, which he ended with the words "thank you and goodbye", he drove straight to Buckingham Palace for his private meeting with the Queen.

That triggered the calling of David Cameron to the Palace to be formally invited to form a government.

Mr Cameron spent almost half an hour inside the Palace. At 8.36pm he emerged, officially Prime Minister.

He paid tribute to Gordon Brown, saying Britain was "more open at home and more compassionate abroad" than a decade ago.

He said Britain's best days were still ahead and that he was seeking a full coalition with the Lib Dems to enable him to lead people through the difficult decisions ahead.

He said a guide for his vision of Britain was "those who can, should, and those who can't we will always help.

"This is going to be hard and difficult work."

Mr Brown's earlier statement pre-empted the expected announcement of a formal deal between the Conservative and Liberal Democrat parties.

It is understood the Conservatives are to ditch their inheritance tax plans in favour of the Lib Dems £10,000 tax threshold and that part of the deal is for fixed term parliaments starting today.

The Lib Dems will have four cabinet posts, with Nick Clegg installed as deputy prime minster. Vince Cable will be second to George Osborne at the Treasury, although full details of the deal are yet to be announced.