The Democratic Unionist Party has indicated it is willing to form a government with Theresa May's Conservatives without the need for a formal coalition deal.
The Prime Minister visited the Queen just after noon to tell her a deal has been put in place and request permission to form a new minority government.
Despite failing to secure a Commons majority and mounting calls from senior Labour and Tory figures for Ms May to step aside, the Conservative party has carried out extensive talks with the DUP throughout the night.
The DUP, who are the largest unionist political party in Northern Ireland, said their desire to form a coalition with Ms May is driven by concerns about Jeremy Corbyn becoming Prime Minister.
Although no party has an overall majority, the Conservatives remain the largest party with 318 seats so far while Labour currently have 261 - with 326 required for a majority and just one seat left to be called.
Mr Corbyn's party increased its share of the vote by 9.6 per cent, winning a larger share of the vote in last night's election than Tony Blair achieved when he took power in 2005. While the Tories were up 5.5 per cent, the Lib Democrats, Greens and SNP witnessed small loses and Ukip's vote was left in tatters.
But with the general election delivering a hung parliament - a result few expected - the DUP has been catapulted into a position of surprising power and influence despite being one of the smaller parties in the Commons.
The Northern Irish party, who are arguably the most socially conservative party in Britain, said they would consider coming to a “confidence and supply” agreement. This means they will cease to reach a formal coalition but provide support in the House of Commons.
If the DUP were to supply votes on policy and support in any Commons vote of confidence, the Tories could ultimately hold an effective majority of around 13.
“We would consider a supply and confidence arrangement to make sure Theresa May would have sufficient support to keep her in government,” one DUP MP told Sky News.
Nevertheless, the party said their support would come at a cost and they would demand more resources for Northern Ireland and clout in trade deals and Brexit talks.
The reports came despite DUP leader Arlene Foster earlier arguing it would be "difficult" for Ms May to clutch on to power in her position. In spite of Mr Corbyn's calls for Ms May to step aside after a seriously disastrous election result, the Prime Minister appears adamant to remain in Number Ten.
Ms Foster has also declared the general election result as a "good night for the Union". The DUP, whose controversial policies include blocking gay marriage and lifting the ban on abortion, made significant gains on election night at the expense of the Social Democratic and Labour Party (SDLP) and the Alliance Party.
The party passionately campaigned to Leave in the Brexit referendum but has said it is keen to avoid a "hard Brexit" situation which would result in a hard border with Ireland.
She has said: “No-one wants to see a ‘hard’ Brexit, what we want to see is a workable plan to leave the European Union, and that’s what the national vote was about – therefore we need to get on with that.
“However, we need to do it in a way that respects the specific circumstances of Northern Ireland, and, of course, our shared history and geography with the Republic of Ireland."
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