"We have a parliamentary, and not presidential, system in this country.
As I said on Friday, with no party able to command a parliamentary majority, arising from the general election, my constitutional duty as Prime Minister is to ensure that government continues, while parties explore options for forming a new administration, with majority support in the House of Commons.
The business of government has continued, including concerted action in Europe today, to avert the financial crisis in the euro area.
Alistair Darling, the Chancellor, spent much of his time yesterday in the European finance ministers' meeting in Brussels.
This morning I have had conversations with the president of the European Council, the managing director of the International Monetary Fund, and the president of the European Central Bank.
WHAT HE MEANT You won't believe it, but I have been getting on with the job of being Prime Minister since last Thursday's election – as the rules require. We can't be without a PM or a government.
I have said I would do all I could to ensure that a stable, strong and principled government is formed, able to tackle Britain's economic challenges effectively.
WHAT HE MEANT The financial markets might not like what I am about to say but we will do everything we can to calm them down.
As we know, the Liberal Democrats felt they should first talk to the Conservative Party. Mr Clegg has just informed me that, while he intends to continue the dialogue he has begun with the Conservatives, he wishes now to take forward formal discussions with the Labour Party.
I believe it is sensible, and it is in the national interest, to respond positively.
WHAT HE MEANT The failure of the Liberal Democrats and the Tories to seal a deal has given Labour an opening and we intend to take it.
The Cabinet will meet soon. A formal policy negotiating process is being established under the arrangements made by the Cabinet Secretary, similar to the negotiations between other parties.
The first priority should be an agreement on a deficit reduction plan, to support economic growth and a return to full employment.
I know that both parties recognise the importance of ensuring economic stability in the markets and protecting Britain's standing, and both are agreed on the need for a strong and full deficit reduction plan over the coming years.
There is also a progressive majority in Britain, and I believe it could be in the interests of the whole country to form a progressive coalition government.
In addition to the economic priorities, in my view, only such a progressive government could meet the demand for political and electoral change which the British people made last Thursday. .........
Our commitments on a new voting system for the House of Commons and for the election of the House of Lords are clearly part of this.
WHAT HE MEANT The only prospect of Labour staying in power – and keeping the Tories out – is to forge an alliance with the Liberal Democrats, which some people in both parties have been keen on for some time.
I would, however, like to say something also about my own position.
If it becomes clear that the national interest, which is stable and principled government, can be best served by forming a coalition between the Labour Party and the Liberal Democrats, then I believe I should discharge that duty to form that government, which would, in my view, command a majority in the House of Commons, in the Queen's Speech, and any other confidence votes.
But I have no desire to stay in my position longer than is needed to ensure the path to economic growth is assured, and the process to political reform we have agreed moves forward quickly.
WHAT HE MEANT It is clear that I could be a stumbling block to an agreement with Nick Clegg, who might do a deal with Labour but not with me if I am going to hang around.
The reason we have a hung parliament is no single party or leader was able to win the full support of the country. As leader of my party, I must accept that is a judgement on me.
I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election.
WHAT HE MEANT When I lost last week's election, I knew I should not lead my party into the next one.
I would hope that it would be completed in time for the new leader to be in post by the time of the Labour Party conference. I will play no part in that contest, I will back no individual candidate.
WHAT HE MEANT I want Ed Balls to succeed me but I can't say that.
I believe that the British people now want us to focus on the economy, the continuing fight against terrorism, the terrorist threat to our country.
They want us to continue to pursue the economic recovery and I will do so with my usual vigour and determination.
I will do all in my power to support the British troops, whose service and sacrifice create a debt of gratitude we can never fully repay.
WHAT HE MEANT At least I can hang on as Prime Minister until September. Better than standing down immediately – and letting Harriet Harman take over on a temporary basis.
I believe on Thursday the country was also telling us they want a new politics, and the political reforms we seek will help deliver that change.
I now intend to facilitate the discussions that the Liberal Democrat party has asked for.
Thank you very much. As you will understand I will take no questions this evening.