Gordon Brown could seek to cling to power through horse trading with the Liberal Democrats and other parties, if exit polls are correct.
The projected total of Labour and Lib Dem seats at 316 would be enough to trump the Tories' 305 seats.
But that would still leave Mr Brown's bloc short of an overall majority.
In simple arithmetic, a party needs 326 MPs for a majority in the Commons. But the Speaker, by convention, does not vote and Sinn Fein MPs have traditionally not taken up their seats at Westminster - so that alters the maths straight away.
And it is possible for a minority government to continue in office on a vote-by-vote basis, without any formal or informal deal with another party or parties, unless and until it loses a vote of confidence in the House.
With no party winning a clear majority, convention states that Mr Brown will still be Prime Minister and Labour ministers will remain in office.
He is the Queen's Prime Minister and they are her Government until such time as he advises her to summon another party leader to the Palace to take over the reins or asks for another election.
Recently-published Cabinet Office guidance states: "Where an election does not result in a clear majority for a single party, the incumbent Government remains in office unless and until the Prime Minister tenders his and the Government's resignation to the Monarch.
"An incumbent Government is entitled to await the meeting of the new Parliament to see if it can command the confidence of the House of Commons or to resign if it becomes clear that it is unlikely to command that confidence.
"If a Government is defeated on a motion of confidence in the House of Commons, a Prime Minister is expected to tender the Government's resignation immediately.
"A motion of confidence may be tabled by the Opposition, or may be a measure which the Government has previously said will be a test of the House's confidence in it. Votes on the Queen's Speech have traditionally been regarded as motions of confidence."
Mr Brown can be expected to hold on to power for as long as he sees a possible way to do so.
But there is speculation that David Cameron may challenge convention by declaring himself the winner if he beats Labour soundly but falls marginally short of an overall majority.
In such circumstances, Mr Brown would have to weigh up whether holding on is possible in the face of what would be intense political, public and media pressure.