Britain's Conservative Party and Liberal Democrat Party have agreed the outline of a deal to form a new government, Sky News reported on Monday.

According to Sky Sources, the negotiations between the two parties are entering the endgame. The outline of a deal is in place, but Lib Dem party leader Nick Clegg is addressing his party's parliamentary members on coalition government and putting the deal to them.

The Tory and Lib Dem negotiating teams met again on Monday morning and has reported good "progress."

Clegg said "we are working around the clock to try and act upon the decision of the British people in last Thursday's results."

"I do not think a period of uncertainty is a good time, I want to arrive at a decision as soon as possible," he added.

The British general election held on Thursday has produced a "hung parliament," the first since 1974, as no party wins an absolute majority. Conservative party won 306 seats in the election and became the largest party in the parliament but not passing the necessary 326-seat mark for controlling the 650-member House of Commons. The Labor Party won 258 seats and the Liberal Democrats occupied 57 seats.

The Conservative Party and the Labour Party have been talking to Lib Dems on forming a new government since Friday.