UK PM plans to step down by Sept.

LONDON — The Conservative Party has offered to hold a referendum on electoral reform in a last-ditch bid to woo the third-place Liberal Democrats into joining them in forming a new government.

The first-place Conservative Party has been in intensive negotiations to secure the loyalty of the Liberal Democrats, whose support they need to run the country after Britain's general election left the country with no clear winner.But the progress of those talks was

thrown into doubt when Labor Party leader, Prime Minister Gordon Brown, announced that he was also in talks with the Liberal Democrats in an effort to cobble together an alternative coalition. Brown announced Monday evening he would step down as party leader by September, a condition of the Liberal Democrats for entering negotiations.In a remark clearly aimed at the Liberal-Democrats, Brown said electoral reform was urgently needed.RELATED:Analysis: A rather Israeli election crisisLabour, Tories court Lib-Dems

Clegg commended Brown on his statement, saying it must have been personally very difficult for him to make, and Brown had made it in the national interest. Clegg said he considered the announcement "could be an important element in the smooth transition towards a stable government." He did not commit himself to reaching an agreement with Labor necessarily, however.Earlier Monday David Cameron and Nick Clegg met face-to-face, as teams of party negotiators tried to hammer out a power-sharing deal. Clegg also met separately with Brown.

Some observers suggested that Clegg's party might be open to talks with Labor if Brown agrees to step down, due to Cameron's expected refusal to back sweeping electoral reform.

The key issue: Electoral reform, which the Liberal Democrats demand but which the Conservatives fear would banish them to the political wilderness for years to come.