UPDATE:UK Elections 2010:David Cameron dismisses Labour but refuses to declare victory

David Cameron, leader of the Conservatives, delivers his victory speech at the count in his Witney constituency
David Cameron declared early this morning that Labour had lost their mandate to govern Britain, but cautioned that he would be guided by the national interest as the Conservatives waited to see whether Britain has elected a hung parliament.

The Conservative leader silenced his internal critics – delivering the greatest electoral surge for his party since 1931.
Across the country, swings to the Conservatives exceeded those that propelled Margaret Thatcher to power, even if the party was struggling to win an outright majority.

Addressing the crowds at his own count in Witney at 3am,he said “I believe it is already clear that the Labour government has lost its mandate to govern our country,” Cameron said. “It looks as if the Conservative party is on target to win more seats than we have done at any election for perhaps as long as 80 years.”

Senior Tories quickly made the comparison, reminding grassroots members of the mountain that he had to climb to grasp a majority.
The exit poll showed Mr Cameron on course to gain at least 97 seats.

An initially aggressive Tory response, in which George Osborne told Gordon Brown to “get real” and accept that he must leave office, was toned down by Cameron when he spoke after winning his Witney seat.

“It is pretty clear that Labour cannot continue in government,” Osborne told the BBC shortly after 11.30pm. “They’ve been rejected by the British people and Britain needs a change of government.”

Amid uncertainty as to whether the Tories would gain an overall parliamentary majority, Cameron said he would act in the national interest. “What will guide me in the hours ahead, and perhaps longer than the hours ahead, will be the national interest – to do what is right for our country, to make sure we have that government, have that stability, take the right decisions.

“We live in difficult times but this is a great country and we will come through them and be stronger. At all times what I will do is put the national interest first to make sure we have good, strong, stable government for our country.”

To win a majority the Tories would need a swing from Labour of around 7 per cent, but early returns suggested they were doing better than that in many parts of the country.

As the first results came in, Mr Cameron took Battersea and seized Kingswood on a 9 per cent swing from Labour.

They also grabbed the Welsh seat of Aberconwy, plus Loughborough, Tamworth, Basildon South, the Vale of Glamorgan and Leicestershire North West.

They gained a major scalp by ousting LibDem Lembit Opik in Montgomeryshire on a 13 per cent swing.

The results showed strong progress in seats targeted by Lord Ashcroft, the controversial deputy chairman of the party, who was being quietly praised within senior circles for putting money early into the key seats.

The Tories, who fear Gordon Brown will try to form a coalition with the Lib Dems, initially mounted an aggressive operation against this.

Tory sources let it be known that Cameron would like to kick off a new government later today by announcing the establishment of a national security council to oversee foreign and defence policy.

Kenneth Clarke, the shadow business secretary, who led the Tory campaign against a hung parliament, said the financial markets wanted a strong government.

He told Sky News: “The key thing is to produce a strong and stable government … The bond markets will start trading at 1am. They’ll be following this programme and quite a lot of rather sharp traders will be placing their bets on whether or not Britain is capable of producing a strong and sensible government that will be able to tackle the debt and deficit problem that is going to dominate the life of the next parliament.”

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