Nick Clegg Holds All The Cards Despite Fewer Seats

With 649 out of 650 constituencies reporting here are the U.K. election results:

Conservatives - 306
Labour - 258
Liberal Democrats - 57
Democratic Unionist Party - 8
Scottish National Party - 6
Sinn Fein - 5
Plaid Cymru - 3
Social Democratic & Labour Party - 3
Green - 1
Alliance - 1

The Conservatives gained 100 seats but fell short of a majority government. They would have needed to win 326 seats. Now since the Sinn Fein MPs won't take their seats (not that it stopped them from claiming MPs expenses) the Tories could form a working majority with the Democratic Unionists, the SNP and Plaid Cymru. But it would be very, very fragile.

Despite the fact the Liberal Democrats have five fewer seats in this Parliament let's make no mistake. They are far more powerful now than they have ever been. The Liberal Democrats do have a leg up. Or should I say a Clegg up.

So David Cameron has no choice but to make an overture to Nick Clegg. The Liberal Democratic leader has become a kingmaker. What will be the price Cameron must pay? Vince Cable becoming Chancellor of the Exchequer? A referendum on proportional representation?

Or are we headed for another Labour-Liberal coalition?

Nick Clegg holds all the cards.