The Conservatives have given the Liberal Democrats "a final offer" of a referendum on changing the voting system to the Alternative Vote (AV) method.

The move was a response to Gordon Brown's resignation to promote a deal between Labour and the Liberal Democrats.

Shadow Education Secretary Michael Gove denied that the Tories and Lib Dems disagreed on fundamental issues, saying they had "moved towards" each other on policies regarding tax and the deficit.

He also indicated that the Conservatives had moved towards the Liberal Democrat manifesto promise to take lower paid workers out of tax.