They are likely to limp back into power as a minority government, backed by Northern Ireland's unionists.

But Mrs May faces calls for her resignation from outside and inside her party, after a disastrous campaign that began with predictions of a landslide victory.

Her opponent Jeremy Corbyn said "politics has changed" in the UK, as "people have said they've had quite enough of austerity politics".

Mrs May had lost votes, and lost the support and confidence of the country, he said.

"I'd have thought that's enough [for Mrs May] to go … and make way for a government truly representative of all this country."

Mrs May's decision to call a snap election has been hailed the most stunning own goal in British politics since David Cameron decided to hold the Brexit referendum.

The election result will most likely change the face of Brexit, with the UK's hand weakened in negotiations in Brussels, and the government uncertain what kind of Brexit deal might pass the new House of Commons.

Many - including David Davis, the government's own Brexit minister - predicted it could mean a rethink on the "hard Brexit" choices of an exit from the single market and customs union.

If so, Australia will have to tear up its plans for a free-trade deal with the UK.

The Conservatives were saved from an even worse result by surprise gains in Scotland, where the Scottish National Party's push for a new independence referendum backfired spectacularly.

If it wasn't for the nationalists' miscalculation, Labour leader Jeremy Corbyn could have been picking up the keys to 10 Downing Street.

In the early hours of Friday morning, Mrs May stopped short of saying she would stay on as Prime Minister.

"At this time more than anything else this country needs a period of stability," she said.

Mr Corbyn led his party to win millions more votes - an extra 10 per cent of voters - compared with Ed Miliband in 2015.

Conservative MP Anna Soubry said the Conservatives had run a "dreadful campaign", which had been "run about [Mrs May] and what she wanted to do".

"This is a very bad moment for the Conservative Party," she said. "She needs to consider her position."

Mrs May's campaign was damaged by a U-turn on a manifesto policy on social care for the elderly, which was dubbed a "dementia tax".

She also boycotted TV debates, which struck a sour tone with an electorate already grumpy at being put through another election, just two years since the last.

Polling showed that Mrs May lost credibility during the campaign, while Mr Corbyn gained. However, he was coming from a very low base, and Mrs May from a high one.

Mr Corbyn was hindered by his reputation as a far-left Marxist, and was continually confronted with his record on issues such as security and his reluctance to consider the use of Britain's nuclear deterrent.

But he has generally been credited with a strong campaign, and his classic social democratic manifesto, heavy on taxing the rich and corporations in order to boost public services, appealed to Britons weary of austerity and seeking an alternative.

In a night of surprises, former Liberal Democrat leader and deputy prime minister Nick Clegg lost his seat to Labour.

A clearly devastated Mr Clegg, who represented Sheffield for 12 years, said he had never shirked from political battles.

"You live by the sword and you die by the sword," he said, forecasting an "excruciating task of trying to assemble a sensible government".

He also warned the country was left deeply divided, especially between young and old.

Much of the Labour voting surge came from young voters.

Former SNP leader Alex Salmond and the leader of the SNP in Westminster, Angus Robertson, both lost their seats to the Conservatives.

The Brexit minister conceded that the government's approach to Brexit would have to change.

He said the party had put before the electorate the prospect of leaving the customs union and single market. "That's what it was about, that's what we put in front of the people, we'll see by tomorrow whether they've accepted that or not."

In Scotland, SNP leader Nicola Sturgeon admitted that the independence push had been a factor in the result and "I will reflect on that".

The night also saw the UK Independence Party wiped off the electoral map, losing most of its 2015 voters.

Former UKIP leader Nigel Farage said he would have "no choice" but to return to frontline politics if the government faltered on Brexit.