David Cameron heads back to Downing Street as the Conservatives win a majority, as Ed Miliband, Nick Clegg and Nigel Farage all resign saying their parties need new leadership. Photo: BBC

The Conservatives made gains in England and Wales and are forecast by the BBC to secure 331 seats in the Commons, giving them a slender majority.

Labour leader Ed Miliband said he would stand down on Friday, saying his party must "rebuild" with a new leader.

Lib Dem leader Nick Clegg has already said he will quit, with his party set to be reduced from 57 to eight MPs.

UKIP leader Nigel Farage is also quitting after he failed to win Thanet South, losing by nearly 2,800 votes to the Conservatives.

In other election developments:

• The BBC forecast, with 635 of 650 seats declared, is Conservative 331, Labour 232, the Lib Dems 8, the SNP 56, Plaid Cymru 3, UKIP 1, the Greens 1 and others 19.
• The Conservatives are expected to get a 37% share of the national vote, Labour 31%, UKIP 13%, the Lib Dems 8%, the SNP 5%, the Green Party 4% and Plaid Cymru 1%.
• Ed Miliband steps down after a "difficult and disappointing" night for Labour which saw Ed Balls lose and Jim Murphy and Douglas Alexander defeated by the SNP
• Nick Clegg said he would quit as leader after a "crushing" set of losses, which saw Vince Cable, Danny Alexander, David Laws, Simon Hughes and Charles Kennedy among a slew of Lib Dem casualties
• George Galloway, who was reported to the police for retweeting an exit pollbefore voting ended, has lost to Labour in Bradford West
• Nigel Farage has quit as UKIP leader after failing to be elected - although he may stand in the ensuing leadership contest. Douglas Carswell retained his Clacton seat
• Conservative minister Esther McVey was the highest-profile Tory loser, defeated by Labour in Wirral West
• The Green Party gets one seat after Caroline Lucas retains the Brighton Pavilion constituency she won in 2010
• With 15 seats left to declare, turnout is expected to be 66%, marginally up on 2010 and the highest since 1997

Mr Cameron is set to form a majority Conservative government, without the need for a coalition or the formal support of other parties.

The finishing line needed to form an absolute majority is 326, but because Sinn Fein MPs have not taken up seats and the Speaker does not normally vote, the finishing line has, in practice, been 323. In this election, Sinn Fein kept four seats.

Mr Cameron all but declared victory in a speech after being returned as MP for Witney, in which he set out his intention to press ahead with an in/out referendum on Britain's membership of the European Union and to complete the Conservatives' economic plan.

David Cameron is having an audience with the Queen later as he begins to form his government

Ed Miliband said he accepted "absolute and total responsibility" for his party's defeat

"My aim remains simple - to govern on the basis of governing for everyone in our United Kingdom," he said.

"I want to bring our country together, our United Kingdom together, not least by implementing as fast as we can the devolution that we rightly promised and came together with other parties to agree both for Wales and for Scotland.

"In short, I want my party, and I hope a government I would like to lead, to reclaim a mantle that we should never have lost - the mantle of One Nation, One United Kingdom. That is how I will govern if I am fortunate enough to form a government in the coming days."

Mr Cameron later returned to Downing Street with his wife Samantha and is now having an audience with the Queen at Buckingham Palace.

Chancellor George Osborne said the Conservatives had been "given a mandate to get on with the work we started five years ago" and would follow the "clear instructions" of the British public.

However, Work and Pensions Secretary Iain Duncan Smith acknowledged that governing with a small majority was difficult.

"Whatever else we now do we keep it simple, we keep it focused and we absolutely stick to our manifesto commitments," he told the BBC.

He said the party would deliver an EU referendum as it was a "red line".

Analysis by Nick Robinson

Not since the fall of Thatcher or the Blair landslide has there been a political moment quite like this one.

Personal triumphs for David Cameron and Nicola Sturgeon will not just reshape British politics but could perhaps reshape the future of the United Kingdom itself.

Bitter disappointment for Ed Miliband and a political disaster for Nick Clegg may lead to both men quitting, and is sure to lead to months of soul searching for their parties as they mourn the loss of some of their most famous faces - felled by a brutal electoral firing squad.

If UKIP's Nigel Farage fails to win his seat, as many expect, he promised too that he would resign. His party amassed millions of votes in England, more than the SNP in Scotland, but they have struggled to convert them into seats.

The future, though, belongs to David Cameron who defied all those - including at times himself - who doubted that he could ever increase his party's support.

Although it won a number of seats in London, Labour failed to make the headway it wanted in the South of England and the Midlands, failing to take its top target seat, Warwickshire North, back from the Conservatives.

Speaking in London, Mr Miliband said he had phoned David Cameron to congratulate him on his victory.

He said he would step down as leader with immediate effect and that deputy leader Harriet Harman would succeed him pending a leadership contest.

Labour, he said, needed an "open and honest debate about the way forward without constraints".

"I am truly sorry that I did not succeed," he told party supporters. "I have done my best for five years."

He added: "Britain needs a strong Labour Party. Britain needs a Labour Party that can rebuild after this defeat. We have come back before and we will come back again."

Labour has been hammered in Scotland by the SNP, with Nicola Sturgeon's party seizing 56 of the nation's 59 seats. Jim Murphy, leader of the Scottish Labour Party, and shadow foreign secretary Douglas Alexander both lost their seats to the SNP, which is benefiting from a 27% average swing from Labour.

Conceding defeat, Mr Murphy said it had "proven hard to turn round years of difficulties with the Scottish Labour Party in just five short months".

Mr Clegg said the results were the most "crushing blow" to the Liberal Democrats since they were formed in the late 1980s and a leadership contest would take place in due course to choose his successor.

"This is a very dark hour for our party," he told party supporters in London. "But we cannot allow the values of liberalism to be extinguished overnight. Our party will come back. Our party will win again."

Speaking at the start of the night, the Lib Dem election chief Lord Ashdown told the BBC that he would "publicly eat my hat" if exit polls predicting the party would win only a handful of seats were borne out.

Green Party leader Natalie Bennett fell to an expected defeat in Holborn and St Pancras, finishing in third place. But the party appears to have increased its share of the vote, including in some of the big northern cities and retained Brighton Pavilion, which the party won in 2010.

A total of 650 Westminster MPs will be elected, with about 50 million people registered to vote.

There are also more than 9,000 council seats being contested across 279 English local authorities.

Mayors will also be elected in Bedford, Copeland, Leicester, Mansfield, Middlesbrough and Torbay.