GORDON Brown announced tonight he was quitting as Labour leader as he revealed that Nick Clegg had requested formal talks with his party over a future government.

Mr Brown said he was asking the Labour Party to call a leadership election in which he would play no part.

He said he hoped the new leader would be in place in time for the autumn party conference.

He also said he was to press ahead with formal discussions with the Liberal Democrats after the request from Mr Clegg.

In a statement in Downing Street, Mr Brown said it was sensible and in the national interest to respond positively to the request.

He said the Cabinet would meet soon and a formal policy negotiation process would be established.

Slough MP Fiona Mactaggart, who has criticised Mr Brown’s leadership in the past, said he had done the ‘‘right thing’’.

‘‘It is a recognition that Labour lost the election, which I think has not been made clear until this point,’’ she told BBC Radio 4’s PM programme.

‘‘I understand that the constitutional position is that he remains Prime Minister and that’s an issue so he needed to stay on in that role.

‘‘I don’t know why it took him until today to say that he felt that there should be a new future leader of the Labour Party. It’s a hard decision to make.’’ There were a ‘‘number of really well-qualified candidates’’ who could replace Mr Brown, Ms Mactaggart added.

Cabinet minister Douglas Alexander - Labour’s general election co-ordinator - said Mr Brown had decided to step down last week.

‘‘He made a judgment shortly after the election results that this was the right course of action,’’ he told Sky News.

‘‘He is very keen to ensure that he meets his constitutional obligations which is to ensure that a government is formed.

‘‘If that government involves the Labour Party then, of course, he would be leading the Labour Party and would be Prime Minister but he has also made clear his determination to assume responsibility for the result on Thursday evening and, in time, to demit office.’’ Transport Secretary Lord Adonis, a former Liberal Democrat who is one of Labour’s team for negotiations with the third party, told the BBC: ‘‘I hope that these discussions with the Liberal Democrats are successful and I very much hope and - though I can’t speak for them - I think it is possible for us to form a coalition government.

‘‘So the prime quality we will need in a new Labour leader is fitness to hold the office of Prime Minister. I think Labour Party members, if we do remain in government, will be looking very carefully at which is the leader who is fit to be Prime Minister.’’

The Tories secured 306 of the 649 constituencies contested on 6 May. It leaves the party short of the 326 MPs needed for an outright majority, with the Thirsk and Malton seat - where the election was postponed after the death of a candidate - still to vote.

Labour finished with 258 MPs, down 91, the Lib Dems 57, down five, and other parties 28.

If Labour and the Lib Dems joined forces, they would still not have an overall majority.

With the support of the Northern Irish SDLP, one Alliance MP, and nationalists from Scotland and Wales they would reach 328 - just enough to squeak through with a working majority.