LONDON – Prime Minister David Cameron was celebrating a surprise victory in the British election Friday as his Conservative Party won a narrow outright majority over a faltering opposition.
The result lifted a fog of uncertainty, removing the prospect of an inconclusive hung parliament.
However, it leaves Britain facing two constitutional crises: a potentially damaging referendum on whether to quit the European Union, and renewed pressure from Scottish nationalists who want to leave the 300-year-old United Kingdom.
The opposition Labour Party took a beating, with its main campaign strategist among those voted out.
Shares in U.K. financial institutions jumped in early trading Friday as the threat of Labour’s proposed tax hikes on banks receded.
The energized Scottish National Party pulled off a landslide, taking 56 of the 59 seats in Scotland and setting a string of records including the election of Britain's youngest member of parliament for 350 years — a 20-year-old university student.
‘Scottish Lion Has Roared’: Nationalists in Poll SurgeMay 8, 201500:57
With 647 out of 650 results counted at 12:30 p.m. (7:30 a.m. ET), NBC News' U.K. partner ITV News reported the Conservatives had 328 House of Commons seats — two more than it needed to govern.
The result was far better for Cameron than opinion pollsters, or even his own party, had foreseen. He beamed early Friday after being re-elected in his constituency in England’s rural Oxfordshire.
"This is clearly a very strong night for the Conservative Party," he said.
"I want my party, and I hope a government that I would like to lead, to reclaim a mantle that we should never have lost — the mantle of one nation, one United Kingdom," Cameron said, vowing to counter the rise of nationalism with more powers for Scotland and Wales.
He also said he would fulfil his pre-election promise of a referendum on European Union membership.
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As late as Wednesday, polls had put the result on a knife-edge — but as many as one in four voters said they were still undecided up to the last minute, unsure whether to endorse Cameron’s promised balance of economic recovery and austerity.
Labour Party leader Ed Miliband, whose team engaged former Obama adviser David Axelrod, resigned after what he called "a very disappointing and difficult night," saying he was "deeply sorry" at the result.
Labour Party Leader Resigns Following Defeat in UK ElectionsMay 8, 201500:32
Cameron's coalition partner since 2010, the center-left Liberal Democrats, faced an even worse disaster — losing all but a handful of their seats after supporting right-wing agenda since 2010.
Their leader, Nick Clegg, also resigned. "Clearly the results have been immeasurably more crushing and unkind than I could ever have feared," he told a news conference.
The anti-immigration, anti-Europe UK Independence Party won about four million votes — 12 percent of the total — but only one House of Commons seat. Its leader, Nigel Farage, also resigned and called for reform of Britain's first-past-the-post electoral system.
British PM Cameron Speaks After Constituency WinMay 8, 201500:41
The Associated Press contributed to this report.