Updated June 9, 2017: Theresa May has struck a deal withe the Democratic Unionists that will allow her to form a coalition government, according to The Guardian.
The prime minister is expected to see the Queen at 12:30 p.m. GMT to confirm that a deal is in place.
Original story: Prime Minister Theresa May's gamble in calling an early election backfired spectacularly as her Conservative Party lost its majority in Parliament, throwing politics into chaos. The media, citing sources they did not identify, reported early Friday that May has no intention of resigning despite calls for her to step down.
The shock result could send Britain's negotiations to leave the European Union — due to start June 19 — into disarray. The pound lost more than 2 cents against the dollar. With 636 of 650 seats in the House of Commons declared, the Conservatives had 310 to the Labour Party's 258. Even if the Conservatives won all the remaining seats, the party would fall short of the 326 needed for an outright majority. Before the election the Conservatives had 330 seats and Labour 229.
May called the snap election in the hope of increasing her majority and strengthening Britain's hand in exit talks with the European Union with a "strong and stable government." Instead, the result means the Conservatives will need to rely on support from smaller parties to govern, with more instability and the chance of yet another early election.
"This is a very bad moment for the Conservative Party, and we need to take stock," Conservative lawmaker Anna Soubry said. "And our leader needs to take stock as well."
Labour leader Jeremy Corbyn, who was among those calling on May to resign, said Friday morning that people have had enough of austerity politics and cuts in public spending. He ruled out the potential for deals or pacts with other progressive parties in Parliament.
"The arguments the Conservative Party put forward in this election have lost, and we need to change."
The results confounded those who said Corbyn was electorally toxic. Written off by many pollsters, Labour surged in the final weeks of the campaign. It drew strong support from young people, who appeared to have turned out to vote in bigger-than-expected numbers.
As she was resoundingly re-elected to her Maidenhead seat in southern England, May looked tense and did not spell out what she planned to do.
"The country needs a period of stability, and whatever the results are the Conservative Party will ensure we fulfill our duty in ensuring that stability," she said.
Many predicted she would soon be gone.
"Clearly if she's got a worse result than two years ago and is almost unable to form a government, then she, I doubt, will survive in the long term as Conservative Party leader," former Conservative Treasury chief George Osborne said on ITV.
British media later reported Friday that May had no intention to resign.
The result was bad news for the Scottish National Party, which lost about 20 of its 54 seats. Among the casualties was Alex Salmond, a former first minister of Scotland and one of the party's highest-profile lawmakers.
The losses complicate the SNP's plans to push for a new referendum on Scottish independence as Britain prepares to leave the EU. Scottish Conservative leader Ruth Davidson said the idea of a new independence referendum "is dead. That's what we have seen tonight."
May had hoped the election would focus on Brexit, but that never happened, as both the Conservatives and Labour said they would respect voters' wishes and go through with the divorce.
Despite the surprise election result, French Prime Minister Edouard Philippe said he doesn't believe voters have changed their minds about leaving.
But speaking Friday on Europe 1 radio, he said "the tone" of negotiations may be affected.
"These are discussions that will be long and that will be complex. So let's not kid ourselves," he said. "I'm not sure that we should read, from the results of this vote, that Britons' sovereign decision on Brexit has been cast into doubt in any way."
EU budget commissioner Guenther Oettinger said the EU is prepared to stick to the timetable that calls for negotiations to start in mid-June, but said it would take a few hours at least to see how the results of the election play out in forming a government.
"Without a government, there's no negotiation," he said Friday morning by phone on Germany's Deutschlandfunk radio.
May, who went into the election with a reputation for quiet competence, was criticized for a lackluster campaigning style and for a plan to force elderly people to pay more for their care, a proposal her opponents dubbed the "dementia tax." As the polls suggested a tightening race, pollsters spoke less often of a landslide and raised the possibility that May's majority would be eroded.
Then, attacks that killed 30 people in Manchester and London twice brought the campaign to a halt, sent a wave of anxiety through Britain and forced May to defend the government's record on fighting terrorism. Corbyn accused the Conservatives of undermining Britain's security by cutting the number of police on the streets.
Eight people were killed near London Bridge on Saturday when three men drove a van into pedestrians and then stabbed revellers in an area filled with bars and restaurants. Two weeks earlier, a suicide bomber killed 22 people as they were leaving an Ariana Grande concert in Manchester.
Voters were left flustered by the fast-moving events.
"It's a bit of a mess," Peter Morgan, 35, said in London. "I was kind of hoping it would just go the way that the polls suggested it would and we could have a quiet life in Westminster but now it's going to be a bit of a mess."
Steven Fielding, a professor of politics at the University of Nottingham, said Britain had seen an election "in which the personal authority of a party leader has disappeared in an unprecedented way."
"If she had got the majority she wanted, she would have been a supreme political colossus," he said. "She did not get that and she's a hugely diminished figure. She's a zombie prime minister."