Published: May 12, 2010 11:58 AM EDT

LONDON (AP) - Britain woke up to a new political era Wednesday

with the first full coalition government since World War II - 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 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

153 billion-pound ($236 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.

But the change in government could also mean a change for

Britain's place on the world stage.

Both Cameron and Liberal Democrat Deputy Prime Minister Nick

Clegg have signaled they favor 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 neighbors could also become problematic.

Cameron's party is deeply skeptical over cooperation 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has withdrawn from an alliance with the parties of Germany's Angela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 regroup, with the maneuvering

under way for the job of party leader. David Miliband, the foreign

secretary, has emerged as a candidate and has earned the backing of

another early favorite, 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 II.

"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 defense

secretary.

Other leading positions were being finalized, as were key policy

decision 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.

"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 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.

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