It’s nine o’clock on the morning of Friday, May 7, and the result of the General Election is still unclear, writes John Hipwood.

Gordon Brown flew down from his Scottish constituency overnight and is back in 10 Downing Street.

Everyone is looking anxiously towards the constituencies which didn’t count overnight.

The Tories and Liberal Democrats are hopeful because most of these seats are in rural areas.

But it’s not just country constituencies that have opted out of counting overnight.

Places like Sandwell are keeping the nation waiting and making the financial markets nervous.

At the last count, the Conservatives have the greater share of the popular vote, 35 per cent, four ahead of Labour while the Liberal Democrats have secured 22 per cent.

But the lop-sided electoral system means that Labour has as many seats as the Tories, and Mr Brown isn’t going to let go of the reins of power easily.

Within hours, Mr Brown will have crucial talks with Nick Clegg to see if he can hang on to power by leading a minority government supported by the Lib Dems.

The last time something similar happened was in 1974 when Abba and the Bay City Rollers were in the charts, and the then Prime Minister Edward Heath ended up short of seats at the February election but had the bigger share of the national vote.

He tried and failed to seal a coalition with Jeremy Thorpe’s Liberals.

The Queen then sent for Harold Wilson, leader of the Labour Party, to ask him to form a government.

Given the closeness of the opinion polls, a hung parliament is a distinct possibility with either Mr Brown or David Cameron heading a minority government.

That could send the City into a panic.

The thing that investors fear the most is uncertainty, so the value of sterling could plummet even further and a sudden rise in interest rates would be on the cards.

Neither Mr Brown nor Mr Cameron would be able to implement their programmes, including the tough fiscal and spending cuts which will be required, unless they had Mr Clegg and Vince Cable onside.

The Scottish and Welsh Nationalists and the Ulster Unionists could also come into the picture.

Some commentators believe the right course of action in the event of a hung Parliament would be for all the parties to get together in some kind of national government in a bid to create stability as we try to find our way through the economic crisis.

They say that such a multi-party agreement should last for at least four years, but there is little sign that the major parties would sign up to this.

If the majority-short man residing at No 10 popped back to Buckingham Palace to ask the Queen for another election she would turn him down flat, tell him to get back to Westminster and try to find a way of running the country.

The monarch would not become involved in any bargaining with any party leader, but her ultimatum to Mr Brown would be: “If you can’t form a coalition, I’ll see if I can find someone who can (ie Mr Cameron).”

The man who would be overseeing these events, Cabinet Secretary Gus O’Donnell, recently told a Commons committee: “I believe it is the responsibility of the Prime Minister to ensure that the monarch remains above politics so that when the Prime Minister resigns it is very apparent who the Queen should be calling to produce the next, hopefully stable, government.

“That is precisely why it is the Prime Minister’s responsibility not to resign until that situation is clarified,” said Sir Gus.

It is unlikely a hung parliament would last very long. After leading a minority government for eight months, Harold Wilson went to the country again in October, 1974.

He ended up with a majority of just three, but went on to govern until March 1976, when he handed over to James Callaghan.