LONDON British Prime Minister Theresa May said she would lead a minority government backed by a small Northern Irish party after she lost an election gamble days before the start of talks on Britain's departure from the European Union.
May had called the snap election confident of increasing her Conservative Party's majority to strengthen her hand in the Brexit talks. Instead, her authority has been diminished.
"I'm sorry for all those candidates and hard working party workers who weren't successful," May said in a broadcast statement after a surprise resurgence by the main opposition Labour Party under its leftwing leader Jeremy Corbyn.
"As I reflect on the results I will reflect on what we need to do in the future to take the party forward."
She now risks more opposition to her Brexit plans from inside and outside her party. Some colleagues may be lining up to replace her, although a party source said the post was seen as too much of a poisoned chalice for the time being.
"She's staying, for now," the source told Reuters.
Just after noon, May was driven the short distance from Downing Street to Buckingham Palace to ask Queen Elizabeth for permission to form a government - a formality under the British system.
Her office said later that the key finance, foreign, Brexit, interior and defense ministers would remain unchanged.
The center-right, pro-Brexit Democratic Unionist Party's 10 seats are enough to give May's right-wing Conservatives a fragile but workable majority, which May said would allow her to negotiate a successful exit from the EU.
"Our two parties have enjoyed a strong relationship over many years and this gives me the confidence to believe that we will be able to work together in the interests of the whole United Kingdom," May said outside her Downing Street residence.
The DUP itself said only that it would enter talks and it was not immediately clear what its demands might be. Since any deal is not expected to involve a formal coalition, such talks may not hold up the formation of government.
EU leaders expressed fears that May's shock loss of her majority would delay the Brexit talks, due to begin on June 19, and so raise the risk of negotiations failing.
"Do your best to avoid a 'no deal' as result of 'no negotiations'," Donald Tusk, leader of the EU's ruling council, wrote in a tweet.
With 649 of 650 seats declared, the Conservatives had won 318 seats, the Labour Party had 261 seats, followed by the pro-independence Scottish National Party on 34.
Corbyn, once written off by his opponents as a no-hoper, said May should step down and that he wanted to form a minority government.
The pound hit an eight-week low against the dollar and its lowest levels in seven months versus the euro before recovering slightly on news she would form a DUP-backed government.
The DUP, which May referred to as her "friends", was non-committal in its initial remarks.
"The prime minister has spoken with me this morning and we will enter discussions with the Conservatives to explore how it may be possible to bring stability to our nation at this time of great challenge," Democratic Unionist Party leader Arlene Foster told reporters.
With the complex talks on the divorce from the EU due to start in 10 days, it was unclear what their direction would now be and if the so-called "Hard Brexit" taking Britain out of a single market could still be pursued.
After winning his own seat in north London, Corbyn said May's attempt to win a bigger mandate had backfired.
"The mandate she's got is lost Conservative seats, lost votes, lost support and lost confidence," he said. "I would have thought that's enough to go, actually, and make way for a government that will be truly representative of all of the people of this country."
Corbyn would be unlikely to win backing for a minority government, but was clearly reveling in a storming performance after pundits had pronounced his Labour Party all but dead.
"We need a government that can act," EU Budget Commissioner Guenther Oettinger told German broadcaster Deutschlandfunk. "With a weak negotiating partner, there's a danger that the (Brexit) negotiations will turn out badly for both sides."
But there was little sympathy from some other Europeans.
"Yet another own goal, after Cameron now May, will make already complex negotiations even more complicated," tweeted Guy Verhofstadt, the former Belgian premier who is the European Parliament's point man for the Brexit process.
May's predecessor David Cameron sought to silence eurosceptic fellow Conservatives by calling the referendum on EU membership, expecting Britons to vote to remain. The result ended his career and shocked Europe.
German conservative Markus Ferber, an EU lawmaker involved in discussions on access to EU markets for Britain's financial sector, was scathing.
"The British political system is in total disarray. Instead of strong and stable leadership we witness chaos and uncertainty," he said, mocking May's campaign slogan.
Norwegian Foreign Minister Boerge Brende said the outcome could mean a less radical split between Britain and the EU.
Ruth Davidson, leader of the Conservative Party in Scotland, where its candidates performed well, said the election results showed that the Conservatives should prioritize good trade relations with the European Union. Other Conservatives have emphasized the importance of migration controls.
"We must in my view seek to deliver an open Brexit, not a closed one, which puts our country’s economic growth first.
May had unexpectedly called the snap election seven weeks ago, three years early, polls predicting she would massively increase the slim majority she had inherited from Cameron.
But her campaign unraveled after a policy U-turn on care for the elderly, while Corbyn's old-school socialist platform and more impassioned campaigning style won wider support than anyone had foreseen, notably from young voters, say analysts.
Late in the campaign, Britain was hit by two Islamist militant attacks that killed 30 people in Manchester and London, temporarily shifting the focus onto security issues.
That did not help May, who had overseen cuts in police numbers during six years in her previous job as interior minister.