Cameron on course to stay at Number 10

Forecast to win 316 seats, Tories would be 10 short of the magic number of 326 MPs needed to command an absolute majority. And a collapse in Liberal Democrat numbers was predicted to leave Nick Clegg's party with 10 seats - enough to provide Conservatives with only the barest of majorities in coalition.

Labour were predicted to secure just 239 seats - 17 fewer than their tally at the start of the election campaign - with the Scottish National Party achieving almost a clean sweep of 58 of the 59 seats north of the border. If the figures prove correct, they are certain to raise questions about Ed Miliband's future as leader.

Labour voiced "scepticism" over the exit poll, while shadow chancellor Ed Balls said that, even if it was accurate, the Conservative/Liberal Democrat coalition's majority in the Commons would have been slashed from 72 to zero, leaving Mr Cameron's position in question.

If Mr Cameron was unable to command a majority in the Commons, "it will fall to Ed Miliband as leader of the Opposition to then put a Queen's Speech before Parliament", said Mr Balls.

But Conservative chief whip Michael Gove said it appeared Mr Cameron had won "a very handsome victory". Asked if he thought it credible that Mr Miliband could be prime minister within 24 hours, he replied: "I would be amazed if anyone were to make that argument with a straight face."

Labour sources suggested that Ukip leader Nigel Farage might have failed in his bid to enter Parliament as MP for Thanet South, while the BBC quoted Arron Banks - a major donor to the eurosceptic party - as saying he believed Conservatives had won the seat.

In a tetchy set of comments to media, Mr Farage said Ukip's performance in taking votes from Labour in early-declaring seats in the North East gave the lie to the argument that his party was a threat only to Conservatives.

The exit poll forecast two seats for Ukip - the first it would ever have won in a General Election. And Ukip deputy leader Paul Nuttall insisted Mr Farage was on track for victory by a larger margin than expected in Thanet South, while the party was "buoyant and confident" that it would win more than two seats.

If the exit poll proves correct, it would be the first time that a ruling party has increased its tally of seats since 1983, with Conservatives increasing their strength at Westminster by 14.

It would give Mr Cameron the option of attempting to form a Conservative-only minority government without having to offer ministerial posts and a role in framing legislation to coalition partners.

Although a tally of 316 is below the 326 threshold for an absolute majority, it is very close to the lower figure of 321-322 needed for all practical purposes, assuming Sinn Fein MPs do not take up their seats.

A minority Tory government might hope to get its legislation through with the support of Democratic Unionists, who are likely to win around eight or nine seats in Northern Ireland.

But Mr Cameron would face a battle to impose discipline on 30-40 right-wing Tory backbenchers on issues such as Europe and the family, where they have already established a rebellious record in the 2010 parliament.

The arithmetic could even hand the balance of power in key votes to Ukip MPs, who could be expected to use any leverage this gives them to put pressure on the Prime Minister to bring forward his planned in/out referendum on Britain's membership of the European Union, currently scheduled for 2017.

But the exit poll was starkly at odds with polling during the election campaign, as well as two large-scale conventional surveys conducted after people had voted.

A YouGov ballot-day poll for the Sun of 6,000 people who had voted painted a much brighter picture for Mr Miliband, putting Labour and Tories tied on 34% each, Ukip on 12%, Lib Dems on 10%, the SNP and Plaid Cymru on 5% and Greens on 4%.

And a second survey of 12,000 voters for former Tory treasurer Lord Ashcroft put the share of votes at 34% for Conservatives and 31% for Labour, with Ukip on 14%, Lib Dems on 9% and Greens and SNP each on 5%.

Mr Gove described the exit poll figures as "an unprecedented vote of confidence in David Cameron's leadership" and said he would have "considerable authority" to "go forward with a secure and stable government in the national interest".

London mayor Boris Johnson, arriving for his count in Uxbridge and South Ruislip, said that if the exit poll was right, "then obviously, it's a very, very clear victory for the Conservatives and a very bad night for Labour".

Asked if she had any "qualms" about Mr Miliband's stewardship of Labour's election campaign, shadow home secretary Yvette Cooper - often tipped as a future leader - said: "No, I think Ed Miliband has led a really strong campaign across the country, with so many people out on the doorstep.

"We've seen that - so many people joining the party, being involved in our campaign, so that's why I really think we need to wait until we get those results in."

The pound rose by around two cents against the dollar in the wake of the release of the exit poll, with IG senior market analyst Chris Beauchamp commenting: "A strong Conservative element to the next government sends the message that the economic policies of the past five years will continue, removing concerns about an early end to austerity."

If borne out by results, the polling figures would raise large questions over Mr Clegg's position as head of the Liberal Democrats - even assuming that he retains his seat in Sheffield Hallam. The surviving rump of MPs is likely to include left-wing figures such as former party president Tim Farron, and the party may fight shy of further coalition with Tories while it licks its wounds.

A 10-seat tally would represent a calamitous loss of 46 seats in Westminster for the Liberal Democrats, who lost their deposit in the first three seats to be declared - all safe Labour constituencies in Sunderland which were won by Mr Miliband's party.

But Liberal Democrats dismissed the forecast, with former leader Lord Ashdown telling the BBC's Andrew Neil: "If this exit poll is right, Andrew, I will publicly eat my hat on your programme."

SNP leader Nicola Sturgeon was also cautious about the exit poll, which would represent a historic breakthrough for her party, which would become the third-largest contingent in Westminster and could expect to be rewarded with more seats on committees and more speaking time in the chamber.

Ms Sturgeon tweeted: "I'd treat the exit poll with HUGE caution. I'm hoping for a good night but I think 58 seats is unlikely!"

Green leader Natalie Bennett said it would represent success for her party if it did get the two MPs projected.

"If we have doubled our parliamentary representation and we are sending perhaps Darren Hall in Bristol West to join the brilliant Caroline Lucas in Brighton Pavilion as a strong group of Green MPs in Parliament, then that will be a good result for the Green Party," said Ms Bennett.

A Liberal Democrat spokesman said: "I am not going to pretend the Liberal Democrats are going to have anything other than a bad night."

The spokesman, speaking at the Sheffield count, said the party was "confident but not complacent" that Mr Clegg would retain his seat.

Former Labour leader Neil Kinnock said the Tories could do well because, "there are enough people who are willing to accept that myth and then think they are voting for their own security by voting for Conservative candidates".

"The awful thing is, it's not simply those people who, relatively innocently, are working against their own interests," he told the BBC.

"The real price will be paid by those who truly are innocent."

Asked about how things were looking for Labour, he said: "If it continues like this it's one of great disappointment, not so much for the party, but for what it means for millions of people in Britain."

He said voters were swayed by "mood and self delusion".

"Any opposition to that established attitude, any radicalism, any effort to undertake a different path - not just by Labour but indeed by other parties - is always going to have difficulty countering that established myth, and it appears to be the case in the 2015 election," he added.

Former Tory leadership contender Liam Fox told Sky News: "The results look quite good for us so far.

"It's a very good personal result for the Prime Minister and a very bad result for both the Labour Party and the Liberal Democrats - probably better described as 'catastrophic' for them.

"In the South West it looks like we might have the best night for the Conservatives since 1979 when Mrs Thatcher was swept in. It has felt very, very good."

Former Liberal Democrat deputy leader Simon Hughes said: "We went into government because Labour lost its majority, Labour plus us didn't make a majority.

"The economic situation in the country was dire, Labour had spent all the money, the banks had almost bankrupted us."

Polling expert John Curtice, who worked on the exit poll, told the BBC the Nuneaton result could point to a Tory majority.

He said: "We were expected a one-point swing to Labour in Nuneaton. In practice, with a three-point swing to themselves, the Tories have succeeded in defending this highly marginal seat.

"In practice we now have to take seriously the possibility the Tories could get an overall majority."