Conservative and Liberal Democrat negotiation teams have left coalition talks to report back to their respective party leaders, saying they have been "making good progress".
The Tories left power-sharing talks declaring "further progress" had been made towards deciding if David Cameron could seal a deal to take him to No 10.
Shadow foreign secretary William Hague, speaking after 90 minutes of negotiations at the Cabinet Office in Whitehall, told reporters: "We have made further progress in our meeting with the Liberal Democrats this morning.
"We are now going to report back to David Cameron again, and have meetings with our parliamentary colleagues.
"The negotiating team are working really well together."
Mr Hague, with shadow chancellor George Osborne and party policy chief Oliver Letwin then crossed the road to Parliament, where a growing number of MPs of all parties were gathering.
Lib Dem negotiator Danny Alexander also said "good progress" had been made as his delegation left the talks to update party leader Nick Clegg.
Earlier, speaking outside his London home, leader Nick Clegg said: "I don't think a prolonged period of uncertainty is a good thing. That's why we want to arrive at a decision as soon as possible.
"But I hope people equally understand that it would be better to get the decision right rather than rushing into something which won't stand the test of time."
He added: "Throughout this process, we continue to be guided by our ambitions and objectives of bringing stability to the British economy and introducing the big changes of tax reform, in our schools system, the way our economy is run and the way our political system is organised."
The Liberal Democrat leader said his team was working "flat out around the clock".
On Sunday night, David Cameron held his second face-to-face talks with Mr Clegg in the space of 24 hours. That meeting followed a marathon session, lasting more than six-and-a-half hours, between the Tory and Lib Dem negotiators.
On Monday morning, the parties said they were discussing "specific proposals".
As he left his home, Mr Cameron remained upbeat, telling reporters: "I am always positive."
He is to gather his Shadow Cabinet for a meeting at around 4pm before addressing the party's MPs in a potentially tricky meeting at 6pm.
Mr Cameron and Mr Clegg also had a 30-minute phone conversation on Monday morning to discuss progress in the talks between their parties.
A senior Lib Dem source said: "The conversation was positive and constructive."
Mr Clegg is to meet his MPs at 1pm, followed by talks with his party's federal executive at 5pm. Both bodies have to agree any deal under Lib Dem rules.
Prime Minister Gordon Brown, who is facing an increasing clamour from his own MPs to step down, was joined by some of his most senior lieutenants this morning.
Business Secretary Lord Mandelson, Schools Secretary Ed Balls and deputy Labour leader Harriet Harman slipped into Number 10 shortly after 9.20am.
It appeared last night that Mr Brown had not given up his slender hopes of retaining Labour's grip on power after it emerged he had held a secret meeting with Mr Clegg.
Both sides were playing down the significance of their discussion at the Foreign Office, describing them as "amicable" but stressing that the two men were simply updating each other on the latest situation.
IN DETAIL
Chancellor Alistair Darling said the Tories and Lib Dems should decide today whether they could cut a deal.
He told the BBC's Today programme: "For my part, I don't think it will do any good to let this process drag on.
"I understand that the Liberals and the Conservatives are engaged in talks today. I hope that by the end of today they will decide whether they can do a deal or not.
"We have made it clear that if they can't then, of course, we are ready to listen to the Liberals."
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