The parties’ negotiating teams are currently meeting, after their leaders also met on Saturday for private talks.
Michael Gove, who said he would give up a cabinet seat for a Lib Dem, said the Lib Dems would not be “manoeuvred” into accepting an unsatisfactory deal.
Lib Dem leader Nick Clegg said “everyone was being constructive”.
The Tories won the most votes and MPs in Thursday’s election, but are short of a majority and are seeking support from the Lib Dems to form a government.
