David Cameron has offered an inquiry into the electoral system as he joined Gordon Brown in trying to win support from the Liberal Democrats.
The Tory leader is offering an all-party committee of inquiry to look at possible changes to the voting system - but he stopped short of promising the immediate legislation on a referendum on voting reform offered by Mr Brown.
Mr Clegg, the Lib Dems' leader, said: "This election campaign has made it abundantly clear that our electoral system is broken. It simply doesn't reflect the hopes and aspirations of the British people.
Mr Clegg wants proportional representation (PR) to replace the first-past-the-post system to give smaller parties wider representation in the Commons. Mr Cameron fears PR would boost the number of Lib Dem seats while reducing the number of Tory seats.
As both leaders attempted to secure backing from the Lib Dems, Mr Brown made a Downing Street statement saying: "There needs to be immediate legislation on this to begin to restore the public trust in politics and to improve Parliament's standing and reputation, a fairer voting system is central."
Senior Labour ministers including Lord Mandelson and Peter Hain made it clear the party would be ready to deliver some form of PR in return for the Lib Dems joining them in an anti-Conservative majority in the Commons.
David Cameron's Conservatives cannot reach the 326 threshold for an overall majority. Talks between the three parties could stretch into the weekend and beyond.
Even though Labour has not won the largest number of votes or seats, constitutional convention gives Gordon Brown the right, as incumbent Prime Minister, to try to form an administration. Although he will come under intense pressure to quit, he is not required to do so until it becomes clear that he is unable to command a Commons majority.