Tories-Lib Dems hammer out a governance deal

The UK's new Prime Minister Davd Cameron has said he and Liberal Democrats leader Nick Clegg would "put aside party differences and work hard for the common good and the national interest". He stressed there would be "difficult decisions" but said he wanted to take people through them to reach "better times ahead".

The United Kingdom's new Conservative-Liberal Democrat coalition government has agreed to cut spending, raise the minimum tax threshold, set fixed five-year terms of parliament and reform the voting system as part of the nation's first power-sharing deal in 70 years. Cameron has appointed four other Liberal Democrats to his cabinet and 15 more as junior ministers.

The Lib Dems also accepted Tory plans to put a new cap on non-European immigration, making it harder for Indians, among others, to live and work in the UK.

The Lib Dems dropped their longstanding opposition to the renewal of Britain's Trident nuclear submarine program, but won Conservative support for a referendum on moving to the Australian-style preferential voting or 'alternative vote' system.

Five days of talks between the two parties produced a compromise package that was the basis for the new coalition, following a general election last week that ended in the first hung parliament since 1974. The arrangement gives Britain its first coalition government since the World War II when Winston Churchill led a wartime coalition.

The Conservatives emerged as the largest single party in the 6 May election that triggered the ending of the Labour party's record 13 years in office.