Gordon Brown 'stepping down as Labour leader'

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Gordon Brown is to step down as Labour leader by September - as his party opens formal talks with the Lib Dems about forming a government.

His announcement came as he and the Conservatives woo the Lib Dems in a battle to run the country.

Mr Brown's presence was seen as harming Labour's chances of Lib Dem backing.

The Tories reacted by making a "final offer" to the Lib Dems of a referendum on changing the voting method to the Alternative Vote system.

Conservative sources have told the BBC that on Monday morning the Conservative and Liberal Democrat teams were discussing a stripped-down deal in which the Lib Dems would not topple the Tories in a confidence vote.

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