LONDON — Prime Minister David Cameron's Conservatives looked on course on Friday for a surprise victory in Britain's general election that could herald more economic austerity and redefine the country's future in Europe.
Exit polls upended pre-election forecasts of a knife-edge contest between the Conservatives and Labour, and also pointed to a landslide for Scottish nationalists that will reopen the question of Scotland breaking away from the United Kingdom.
The pound rallied on currency markets as the poll commissioned by Britain's national broadcasters put the centre-right Conservatives on 316 seats, compared to 239 for Ed Miliband's centre-left Labour party.
One of the biggest losers of the night appeared to be the Liberal Democrats, who were in coalition with the Conservatives in the outgoing government but who were suffering a drubbing in early returns.
While they do not give the Conservatives a clear majority, if the results are borne out they could put Britain on a collision course with the European Union as Cameron has promised an in-out referendum on membership.
"If they are right, it will mean the Conservatives have clearly won," Michael Gove, a key ally of Cameron and chief whip in his government, told the BBC.
The first declared results showed Labour failing in key marginals and losing out to the pro-independence Scottish National Party, which was predicted to take all but one of the 59 seats north of the border.
One of its first lawmakers to be elected was 20-year-old Mhairi Black, Britain's youngest MP since 1667, who defeated Labour's campaign chief Douglas Alexander. The head of the Scottish Labour Party Jim Murphy also lost his seat to the SNP.
The Conservatives do not look to have the clear majority of 326 seats in the House of Commons but the results, if confirmed, would put Cameron in a strong position to remain in power, potentially as leader of a minority government working with smaller parties.
Professor Patrick Dunleavy of the London School of Economics said the exit polls indicated that Cameron "looks like he's there for five years" – the full length of a parliamentary term in Britain.
"The paradox is David Cameron survives as prime minister but prime minister of a minority government which doesn't have the votes to do anything radical," he added.
If the Conservatives do fall short of a clear majority, they would have to team up with a smaller party or parties such as the Liberal Democrats or Northern Ireland's Democratic Unionists to take power.
Labour could still attempt to put together an alternative alliance with the SNP and other left-leaning parties but, if the exit polls are borne out, the Conservatives could claim significant moral authority as the biggest party by far.
Negotiations between the main and smaller parties on forming alliances to reach a majority are likely to be complex and experts say they could last for days or even weeks.
City workers cheered, broke out in smiles and threw their arms up in the air at the Draft House pub near the Tower of London as they watched the exit poll on a large screen set up for election night.
"Why would you change? The economy is doing well after five years with the Conservatives," said Grant, who works in Britain's financial hub – a traditional stronghold of Conservative support.
The pound rose to US$1.5462 in Asian trading, up sharply from $1.5262 in New York and its highest level since late February.
Cameron would extend an austerity drive borne out of the 2008 global financial crisis, with the Conservatives vowing to bring the budget of the world's fifth-biggest economy back to balance.
The exit polls also pointed to the Liberal Democrats slumping to just 10 seats from 56 currently, with their leader Nick Clegg and Danny Alexander, deputy to finance minister George Osborne, in danger of leaving their seats.
"I'm not going to pretend that the Lib Dems have had anything other than a bad night," a senior party source said, speaking on condition of anonymity.
All about the numbers
The exit polls put Nigel Farage's anti-EU UK Independence Party (UKIP) on two seats, the same figure as the Greens.
Northern Ireland's Democratic Unionists had eight, Welsh nationalists Plaid Cymru were on four and other parties picked up the remainder.
The final tally of seats will not emerge until Friday afternoon.
Under Britain's electoral system, a party needs to be able to command a majority in the 650-seat House of Commons in order to form a government.
While Cameron may fall just short of that majority, British newspaper front pages reflected expectations that he will return to 10 Downing Street.
"Swinging the blues" was the front page of Conservative-supporting Sun, referring to the Conservative party colours.
But the front page of the left-leaning Daily Mirror was black except for the words "General Election 2015. Condemned Again... Five more damned years?" — AFP