Heralding a new political era in UK which got its first coalition government since the World War II, Conservative leader David Cameron took over as its Prime Minister with support from the centrist Lib Dems that brought down the curtain on the Labour's 13-year reign.
Liberal Democrats' chief Nick Clegg was named Deputy Premier in the new government, among five Cabinet ministers from his party.
Cameron, who assumed the top post last night after Queen Elizabeth II invited him to form the new government following the resignation of incumbent Gordon Brown, said he planned to form a "full" coalition government of his Conservative party and the Liberal Democrats.
Installed at the No 10, Downing Street, 43-year-old Cameron thus becomes the youngest Prime Minister in almost 200 years, since Lord Liverpool who assumed office at 42.
A statement from Buckingham Palace said the Queen had requested Cameron to form a new government.
"The Right Honourable David Cameron accepted Her Majesty's offer and kissed hands upon his appointment as prime minister," it said.
Arriving at 10, Downing Street with his pregnant wife Samantha hand in hand, Cameron said "Britain's best days lie ahead."
"Nick Clegg and I are both political leaders who want to put aside party differences and work hard for the common good and for the national interest."
In his first speech after being named the Prime Minister, Cameron said, one of his major tasks would be to rebuild trust in the political system.
"Yes, that's about cleaning up expense, yes, that's about reforming Parliament and yes, it's about making sure people are in control and that the politicians are always their servants and never their masters," he said.
Cameron said there were huge challenges facing the new coalition in Britain -- which was also making a fragile recovery from the global financial crisis.
"This is going to be hard and difficult work. A coalition will throw up all sorts of challenges," he said. "But I believe together we can provide that strong and stable government that our country needs based on those values -- rebuilding family, rebuilding community, above all rebuilding responsibility in our country."
US President Barack Obama telephoned Cameron to congratulate him and invited him to visit Washington this summer.
Obama told Cameron that he looked forward to their meeting at an international economic summit to be held in Canada next month.
Conservatives' veteran leader William Hague will be the new Foreign Secretary of Britain while George Osborne will be the next Chancellor of Exchequer.
The post of the Defence Secretary will go to Liam Fox and Andrew Lansley, a former civil servant who became an active Conservative in the 1980s, will be the new Health Secretary.
Besides Clegg, four other Liberal Democrats received Cabinet posts.
Lib Dems' economic expert Vince Cable will be the new Business/Banking Secretary while Chris Huhne will be Environment and Climate Change secretary.
While David Laws is tipped as the Education Secretary, Danny Alexander will be the Scottish Secretary.
The agreement over power-sharing came after five days of hard bargaining between the Conservatives, the single largest party with 306 seats in 650-member House of Commons -- 20 short of a simple majority, and kingmaker Clegg's party which has 57 seats.
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