David Cameron could be installed as Prime Minister in the next day or two, with NHS funding one of the main areas of negotiation as the Conservatives move closer to a deal with the Liberal Democrats.
A Tory manifesto pledge promised that the NHS budget would be ringfenced but the Lib Dems are against such a move. They would propose to cut the Department of Health in half, with the abolition of quangos forming part of their plans.
The parties are to meet again in the next 24 hours after negotiating teams held talks which lasted more than six and a half hours in the Cabinet Office.
Mr Cameron (pictured) and Lib Dem leader Nick Clegg then held their second meeting face to face in 24 hours, this time in the House of Commons.
Labour leader Gordon Brown, though, left Downing Street for a secret meeting with Mr Clegg, indicating that he has not given up hope of retaining power just yet.
The Tories also favour a scheme to cover the cost of residential care in old age, which would see a one-off £8,000 voluntary "insurance premium" coming into force.
On tackling the deficit, the Conservatives also plan to eliminate the "bulk" of the government deficit by 2014, with cuts being implemented immediately, as well as freezing public sector pay for one year in 2011-12.
The Lib Dems want to at least halve the deficit by 2014, but, crucially, wait until 2011-12 to reduce public spending for fear of jeopardising recovery. They would set a £400 pay rise cap for all public sector workers, initially for two years.