The UK has a new prime minister and a new government. David Cameron will most likely lead a Conservative Liberal Democrat coalition government, after the Lib-Dem parliamentary party and national executive gave their assent to a deal that will see the Lib-Dems hold five seats in Cabinet.

The breakthrough on a political impasse that has lasted for three days was prompted not by a successful agreement by the Tories and Lib-Dems, but by Gordon Brown’s announcement early on Tuesday evening that he was resigning immediately.

Brown’s announcement came after Labour’s leadership group realised there was no consensus support among the parliamentary labour party for a ‘progressive coalition’ a core Labour-LibDem government (312 seats), with support from Scottish and Welsh nationalists (nine seats), the N.Ireland SDLP (three seats), and possibly the sole Green MP and an ex-UUP independent in N.Ireland.

Brown had floated such an idea in Monday’s announcement, when he had announced that he would be resigning in a few months in any case and then offered the Lib-Dems a full referendum on voting reform, to try and draw them back in.

Sign up for a FREE 21-day trial and get Crikey straight to your inbox

By submitting this form you are agreeing to Crikey's Terms and Conditions.

By Tuesday morning, Labour and the Lib-Dems were negotiating openly though of course they had been doing so in clandestine all weekend. But there were various leaks to suggest that things were not going well. It was alleged that Gordon Brown’s first conversation with Nick Clegg had got all shouty, suggesting to Clegg that Brown couldn’t be worked with.

Later on Tuesday it was suggested that the talks had been foundering, and that Ed Balls a Brownite loyalist, and centre-left figure, had been insistent on the Lib-Dems simply knuckling under to the Labour manifesto.

But the real opposition to the deal was coming from outside, with Labour members lining up to denounce the possibility of a deal. The charge was led by old guard members David Blunkett and John Reid, and swiftly followed by a string of backbenchers, and health secretary Andy Burnham.

By the middle of the day it was clear that the deal would founder outside the negotiations, rather than in. At this point, William Hague and other members of the Tory negotiating team marched ostentatiously down to the Cabinet Offices, to recommence negotiations.

Brown then resigned, and by 7.30pm David Cameron had seen the Queen, and been confirmed as Prime Minister. By 8.30 pm he had moved into 10 Downing Street.

There was wide praise for Brown’s exit speech, a short and direct statement in which he said he was leaving the “second most important job” in the land, to focus on the first, as a “husband and father.” Gaaaack, but he held it together, and then swept down Downing street to the waiting car, with his wife and their two small boys between them.

By mid-evening it had been confirmed that the government would be a coalition one, with Lib-Dem leader Nick Clegg taking the position of deputy prime-minister, Vince Cable as secretary to the Treasury, with the possibility of David Laws being education secretary and Chris Huhne as Home Secretary. Around 15 – 20 Lib-Dems would also serve in the junior ministry, giving around half their entire parliamentary party ministerial representation.

Should this come to pass, the Lib-Dems will hold significant amounts of power, since UK mega-ministries like education operate semi-autonomously. But they are also beholden, with Clegg occupying the nebulous office of deputy PM — a decision labelled by spinmeister Alistair Campbell, who argued that Clegg should have taken a mega-department as being well and thoroughly outnumbered by the Tories.

For their part, many Lib-Dems MPs are gleeful, and not a little hubristic, arguing that the Conservatives have effectively replaced their manifesto with the Lib-Dems. Key Tory policies they have thrown out include removing the inheritance tax bracket raise, removal of the tax bonus for marriage, implementing no income tax under 10,000 pa income, and a commitment to a fixed-term parliament of five years which means, on paper, that the Tories couldn’t pull a swifty on the Lib-Dems once their party is caught in one of its periodic sexual festishism scandals.

And there is of course the referendum, but not on proportional representation, which hasn’t been offered. Instead the UK public will be offered preferential voting (or AV as it is known here), the system which entrenches major parties.

The one sticking point at this stage was the Lib-Dems complex ‘triple-lock’ system, which requires the party leadership — both its parliamentary party and executive to get a 75% vote on any major move, or take it to a full conference.

There was no dissent so this proved no problem, but that in itself may be a problem for the party. Overwhelmingly, the rank and file of the Lib-Dems are to the left of Labour (with an exception in the West Country and Cornwall), many of its members part of a technocratic political elite class.

Many Lib-Dems have spent a lot of time in the election campaigning towards Labour members in key strategic seats, arguing that the only chance of keeping the Tories out was a tactical vote for a coalition. I imagine many of them now feel not only a bit foolish, but also angry.

The Lib-Dems are two parties, as I’ve noted before, but until now that has never mattered and since it was always assumed that they would only enter power in concert with Labour, the centre-right tendencies of Nick Clegg (part of the party’s neo/classical liberal wing on economics) were moot.

Now, these administrators, lecturers, students, reiki massage instructors, old labour exiles and all and all, have returned to power the party of Thatcher and Major. They will be spitting. Labour figures have already claimed that their phones are ringing off the hook with people wanting to rejoin, etc.

This will only get worse, when the new government has to start imposing the cuts that both parties say are necessary to deal with the country’s large deficit. For now, as again Alistair Campbell noted on several interviews, there is now only one major ‘progressive’ party in the UK, and that is Labour.

Campbell’s routine was clearly a launch of the new Labour meme, to be repeated ad nauseum. It has the potential to split the Lib-Dems in two, while at the same time re-unifying Labour through the luxury of oppositionality. Surely any grassroots left activist in the Lib-Dems would by now be sharpening a knife and waiting for their leadership to be on the TV closing down schools, and quietly planning to raise hell at the autumn conference.

Much of that will be avoided if the Conservatives genuinely adopt large parts of the Lib-Dem programme and go soft on the process of cuts. However, if they so do, then they risk angering the rank and file of their own party, who, equally, didn’t sign up for getting into bed with a bunch of beirdie-weirdie social worker types.

Just after half past midnight, Nick Clegg emerged to announce that both the parliamentary party and national executive had endorsed the deal. He made the usual boilerplate, and then spoke directly to the 7 million people who voted for the party, saying, with magnificent understatement, that many of them will have concerns and questions, but that he “believed this represented the best opportunity to usher in the sort of change they all wanted.” We will see.

After that, it all wrapped up. The BBC played a montage of images from thirteen years of New Labour, to the accompaniment of Oasis’s ‘Don’t Look back In Anger.’ And I must admit that that was the first time I thought, my God it really is all over. Whatever New Labour was, and there will be time for that analysis soon, it has gone, gone utterly, leaving much and perhaps taking more.

When it began, in 1997, 911 was the US emergency number, terror was a bomb in Omagh, waterboarding was a beach sport and extraordinary rendition was Celine Dion’s take on ‘You Shook Me All Night Long’. Labour had only just emerged from a wrangle about the dumping of ‘clause four’ from the constitution, which committed the party to public ownership of the productive system.

New Labour came at the tail-end of another era, and bore its marks. It was the means by which the Labour Party, for better or worse, moved beyond those times. This new government comes at the beginning of another time, marked by the 2008 GFC, and a decisive realignment of the social and economic elements of left and right. It will either last the whole of its five year ‘fixed’ term, or it will fall like Icarus, in blindness and fire, within a year.

After the news, after there was nothing more on offer, we crossed from the news to the weather. We were told that tomorrow would be “bright but with a cold and frosty note”, and ain’t that the damn truth?