Paul Waugh has an excellent post on the difficulties and opportunities that will face Cameron if he falls short of winning a majority. Much of the commentary on this has hitherto focused on the difficulties but Waugh is right to suggest that, actually, a minority Tory ministry could probably pass a good deal of legislation and, just as importantly, effect change in other areas without the need for primary legislation.
I doubt Cameron would want to run a minority government for more than 18-24 months but it's worth noting that Stephen Harper's minority ministry in Ottawa still stands and so does Alex Salmond's in Edinburgh. Eventually, of course, the sheen comes off such arrangements (as Salmond may discover next year) but that doesn't mean the Conservatives couldn't position themselves adriotly for the next poll.
And there are difficulties for the other parties too - most notably the Lib Dems. If Cameron decides to go it alone then that's bad news for Nick Clegg. The assumption has tended to be that Clegg would have the upper hand in any discussions about a coalition government but I'm not sure that's still the case. It might be that Clegg could need to do a deal more than Cameron.
Obviously this depends upon the parliamentary arithmetic. But Clegg's supporters aren't voting to keep the Lib Dems on the sidelines when there's the possibility of power. Nor, however, are they voting Lib Dem and hoping that the party will bring down the government within six months so everyone can enjoy a second election.
Clegg, then, finds himself in a ticklish spot. Cameron is hinting at freezing the Lib Dems out and daring the Liberals to do their worst and be responsible, if they want, for a fresh election. Alternatively, the Liberals can help the Tories pass a budget and other vital bills while receiving precisely zero credit for anything these bills achieve but, if they are seen to fail, sharing the blame for their shortcomings. That's not a great position to be in either.
Indeed, an informal or tacit understanding between Cameron and Clegg - the so-called "Supply and Confidence" arrangement - gives the whip hand to Cameron, not Clegg. Yes, the latter could break the arrangement but only at great cost to himself and by inviting the Liberal vote to be squeezed at the next election.
Cameron seems to be playing hardball with the Liberals and this makes Clegg's position more difficult. It could be that he needs a deal more than the Tory leaders. Which in turn would give Cameron, not Clegg, the advantage in any discussions between them.
From the Tory perspective then, one can see how a minority ministry could get most of what it might receive from any formal coalition with the Liberals while leaving the Liberals with very little with which to go back to their constituents. While perhaps not as stabe as a formal coalition, this arrangement, if it comes to pass, might yet prove surprisingly durable.