But Leftist opposition leader Jeremy Corbyn, whose Labour party surged from 20 points behind, urged May to quit, saying she had "lost votes, lost support and lost confidence". Her Labour rival Jeremy Corbyn said she should step down.
This is seen as a humiliation for Prime Minister Theresa May, who chose to call the election to try to strengthen her hand in talks with the European Union on Brexit.
Lib Dem president Baroness Brinton said her party could not work with either Labour or the Tories as both are pushing for a "hard Brexit".
"We're ready to form a government....we are willing to serve the country", he told the BBC.
The Conservatives could potentially turn for support to Northern Ireland's Democratic Unionist Party (DUP), a natural ally, projected to win 10 seats.
The Conservatives' other coalition options are limited.
"The country needs a period of stability, and whatever the results are the Conservative Party will ensure we fulfill our duty in ensuring that stability", she said.
As May's Conservative Party received the highest number of seats and is the largest party, it gets the first crack at forming a government despite not having won a majority.
Theresa May's future as Prime Minister is now in jeopardy as her decision to call a snap election backfired spectacularly as the Conservative Party failed to secure a majority, resulting instead in a hung parliament.
With 97 seats decided, Labour has netted 53 of them and the Conservatives have 31.
The pound earlier fell sharply in value after the BBC/ITV/Sky Exit poll was published when the voting ended at 10pm BST (9am NZT).
As the results came in overnight, it is clear neither the Tories or Labour will reach the 326-seat threshold.
So a coalition government may be preferred.
Apple announces watchOS 4, new iPad Pro
Developers on iOS 11 get a new ARKit which they can use on the iPhone and iPad itself to create apps with augmented reality. Among other things, there are redesigns in the App Store, Calculator, and Podcasts, with a new app drawer in Messages.
Former Scottish National Party leader Alex Salmond was also defeated, losing his seat to a Tory contender.
Her opponents also took issue with her refusal to take part in a televised debate with other party leaders.
A total of 650 Westminster MPs will be elected, with about 45.8 million people entitled to vote.
"The country needs a period of stability and whatever the results are the Conservative Party will ensure we fulfil our duty in ensuring that stability so that we can all, as one country, go forward together", she said.
The campaign began as an attempt by Ms May to increase her party's majority in Parliament ahead of Brexit negotiations, but was upended by terror attacks during the campaign's closing days.
As Britain's second female prime minister, May is often compared to the first, Conservative "Iron Lady" Margaret Thatcher, but struck a markedly different tone, rejecting "untrammelled free markets" and "the cult of selfish individualism". Another factor was the collapse in support for the pro-Brexit United Kingdom Independence Party, with its voters defecting evenly to the two major parties, rather than predominantly to the Conservatives, as many analysts had predicted.
The Queen would not expect to become involved in any negotiations, but the Palace would be kept informed via representatives of the political parties or the Cabinet Secretary.
SNP leader Nicola Sturgeon said the election "has been a disaster for Theresa May". "I don't want to be derogatory, but I think she is a lame duck now". "And there's already uncertainty about Brexit. and we will see more uncertainty". I said at the start this election was wrong.
"But if we get more of a softer Brexit or more of a globalist stance from the UK.it's good for Europe, the UK and USA assets".
May, a 60-year-old vicar's daughter, is now facing questions over her judgement in calling the election three years early and risking her party's slim but stable majority of 17.
Some commentators have drawn comparisons with U.S. presidential candidate Hillary Clinton, who lost out to the unexpected opposition of Donald Trump.
"With the two-year Article 50 clock ticking, the passage of time is sterling-negative", he added, referring to the formal Article 50 process by which Britain is set to leave the EU.
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