Labour hopes of a coalition deal with the Liberal Democrats appeared to be fading, as a Cabinet minister went public with his misgivings about the idea.
Health Secretary Andy Burnham - tipped by some as a potential successor to Gordon Brown as Labour leader - said the party had to "respect" the result of last week's General Election in which Conservatives won most seats and votes.
Reports that Labour had accepted negotiations with Liberal Democrats could go no further were played down by a source close to Mr Brown, who said the party was happy to go on talking. A senior Liberal Democrat insisted the third party's expectation was that talks with Labour would continue.
But an unconfirmed report in the Evening Standard suggested that Mr Brown might stand down as Prime Minister, while the BBC reported that cases were being packed into vehicles at the rear of Downing Street.
Meanwhile, Liberal Democrat and Conservative negotiations were locked in talks at the Cabinet Office in Whitehall which could lead to a coalition between the two parties putting David Cameron in Number 10.
Mr Burnham told a news channel: "I think we have got to respect the result of the General Election and you cannot get away from the fact that Labour didn't win.
"I think David has spoken with real authority on this matter. I would say that clearly the lead option would remain the largest party speaking to the Liberal Democrats. But until we know the outcome of these discussions, it's right to explore other avenues."
Mr Burnham's comments came after a string of Labour figures, including former home secretaries David Blunkett and John Reid, warned that going into a "coalition of the defeated" would lead to electoral disaster for the party.
Mr Blunkett said Labour would "lose very badly" at future elections if it appeared to be ignoring voters' judgment now. "Can you trust the Liberal Democrats? They are behaving like every harlot in history," he said.
Mr Reid warned that voters would punish Labour if they felt it was trying to "cobble something together that patently isn't in the national interest". Former lord chancellor Lord Falconer said Mr Brown should "call it quits now" on efforts to form a coalition government with the Lib Dems.
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