THERESA May’s high-risk gamble of calling a snap General Election appears to have ended in humiliation after an exit poll failed to give the Conservatives an overall majority, but made them the largest party in a hung parliament.

The projection would put the Conservatives 12 short of the 326 required for a parliamentary majority.

If opposition parties were able to form a rainbow alliance, then it could put Labour leader Jeremy Corbyn in No 10 and even increase the prospect of a second Scottish independence referendum.

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Should the poll prove accurate, First Minister Nicola Sturgeon would suffer the worst electoral reverse for an SNP leader in almost 40 years.

The snapshot by Gfk/Ipsos Mori placed the Tories down 17 on 314, Labour up 34, on 266, the SNP down 22, on 34, and the Liberal Democrats up five on 14. There was no change for Plaid Cymru on three, the Greens on one and Ukip on zero while the others were on 18.

Former first minister Alex Salmond in Gordon and SNP deputy leader Angus Robertson in Moray were reckoned to be “under threat”.

However, the BBC made clear the Scottish projections, based on just 10 polling stations in Scotland, should be treated with caution, with many seats finely balanced.

Sterling immediately fell on the markets; down two per cent against the dollar and down against the euro.

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Question marks were immediately raised about the Prime Minister’s future.

Emily Thornberry, the shadow foreign secretary, suggested Labour was “on the verge of a great result” and said if the numbers proved accurate, then Mrs May should go because she had “manifestly failed”.

George Osborne, the former chancellor, echoed the point, telling ITV: “If she has got a worse result than two years ago, it will be hard for her to continue as Tory party leader.”

But Michael Gove, the former justice secretary, defended the Prime Minister, saying she had an “absolute right to stay in place at the end of this night”.

Sir Craig Oliver, former prime minister David Cameron’s former top spin doctor, told Sky News: “If this is true, if this is accurate in CCHQ there will be deep and lasting shock.

“This was the biggest gamble that a politician has taken for a long time. And if that exit poll is right, it has failed.”

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Alastair Campbell, Tony Blair’s former director of communications, tweeted: “This election is a rejection of May and hard Brexit. A vote for one to go and the other to be revisited.”

As the exit poll figures emerged, some senior Tories immediately expressed private disbelief.

Sir Michael Fallon, the Defence Secretary, urged caution, saying this was just a projection. “Let’s see some actual results,” he declared.

Lord Campbell, the former Liberal Democrat leader, also sounded a note of caution given the track record of exit polls, stressing that it would be dangerous to accept them at face value. But the Scottish peer added that Mrs May’s strategy to go to the country to get a larger majority may have “exploded”.

John McDonnell, the shadow chancellor, also warned against reading too much into the prediction, saying: “We have to have some scepticism about all polls at the moment.”

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But he suggested Mrs May’s decision in calling a snap poll appeared to have proved a “catastrophic error”.

If borne out by the actual results, the poll figures would represent a humiliation for the Prime Minister, who went into the election with a small but viable majority and expectations that she should be able to secure an advantage of 100 seats or more in the House of Commons by going to the country early.

Even if the Tories sought the support of the DUP, which in 2015 secured eight seats, they would still fall short of a majority.

There would be question marks about her long-term future as such a result would weaken her position regarding the Brexit talks, which begin in just 11 days’ time, given that she called the election on the basis of strengthening her hand.

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A hung parliament would throw UK politics into disarray as the parties scramble to form a government.

In contrast, the exit poll projection, if it became a reality, would be a personal triumph for Mr Corbyn, who was widely regarded as having run a successful campaign after being written off as unelectable by many observers and some in his own party.

Meanwhile, it would also represent a significant setback for the Ms Sturgeon, whose party won a historic 56 out of 59 seats north of the Border just two years ago. A loss of 22 seats would be a far greater setback than anyone had predicted.

On the markets, sterling fell over 1.5 per cent to 1.27 US dollars following the poll, which shows the Conservatives are set to be the largest party but Against the euro, the pound plummeted over one per cent to 1.13 euros.

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James Knightley, senior economist at ING, said: “Given Labour’s left-wing tax and spend manifesto and desire to nationalise the utility, rail and mail industries, markets are not going to react well if this is the outcome. The fear of higher deficits and national debt is leading to a spike in government bond yields.

“Meanwhile, the greater chance of a Scottish independence referendum in the next couple of years – Labour may have to offer this to get the support of the SNP – will intensify political uncertainty and it is already weighing heavily on the pound.”