Liberal Democrat Leader Nick Clegg speaks to the media as he leaves his house in London on Monday. (Simon Dawson/Associated Press)

British Prime Minister Gordon Brown made a dramatic bid to keep his beleaguered Labour Party in power after it was punished in a national election, announcing Monday he will resign by September at the latest in hopes the third-place Liberal Democrats will join his party in a coalition government.

Brown's startling news conference upped the ante in talks between the Conservatives, who won the most seats in Thursday's election but not a majority in Parliament, and the Liberal Democrats, whose third-place finish leaves them kingmakers.

Almost immediately, the Tories rushed to announce they would offer the Liberal Democrats a referendum on electoral reform — their key demand in the talks — in a bid to secure their loyalty.

The Conservatives have been previously reluctant to accept such reform because they fear it would freeze them out of power.

The new voting system proposed by both the Conservatives and Labour would bring a major change, but is not as sweeping as the plan put forward in the Liberal Democrat election platform.

David Cameron's Conservative Party won 306 of the 650 seats in the House of Commons — short of the 326 needed for a majority but a clear defeat of Brown. Labour won 258 seats, the Liberal Democrats 57 and smaller parties 28.

After the election, Cameron called on Nick Clegg, leader of the Liberal Democrats to discuss a possible power-sharing agreement. Brown, who is still prime minister, also said he would be open to talks with other parties, particularly if the talks between the Tories and the Liberal Democrats fail.

"I don't think a prolonged period of uncertainty is a good thing," Clegg said Monday. "But I hope people will 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."

After the election, Cameron said he wanted the Tories and the Liberal Democrats to work "together in tackling our country's big and urgent problems."

The Tories have been holding talks with the Liberal Democrats since Friday. Liberal Democrat sources told the BBC that the third-place party would consider opening serious negotiations with Labour if Brown agreed to stand down as prime minister.

In the past, the sitting prime minister has been given the first chance to try to form a government even if his party didn't win the largest number of seats.

With files from The Associated Press