The Tories did not win enough seats for an overall majority and were down on their result in 2015, hammering home that the gamble to call a snap election had backfired spectacularly.
With a hung parliament confirmed, the most likely scenario is the Conservative Party will form a minority government or go into coalition government with the DUP.
The night has been an unmitigated disaster for Mrs May – and a successful one for Mr Corbyn, who has surpassed expectations and gained many plaudits even though he is going to lose Labour’s third election in a row.
And though Mrs May hoped a snap election would boost her mandate in Brexit negotiations, many – particularly her opponents in the EU – are now likely to regard her as a busted flush.
And yet, despite that, Mrs May is likely to remain as Prime Minister after the election results are finalised.
At 6am, Paddy Power had Theresa May at 4/6 on, with Jeremy Corbyn out at 4/1.
Betfair also had Mrs May as favourite.
Earlier, Mr Corbyn said his campaign had made politics a “better place” as he was briefly made favourite to be the next Prime Minster by two bookmakers at around 3am.
Shortly after that, Mr Corbyn called on Mrs May to resign in his victory speech (see below) and the shadow Chancellor, John McDonnell, insisted Labour would look to form a government.
— HannahJane Parkinson (@ladyhaja) June 9, 2017
Mrs May herself previously voiced concern that a loss for her would put Corbyn, as Prime Minister, in charge of Brexit negotiations.
While former Ukip leader Nigel Farage questioned Mrs May’s continued leadership of the Conservatives, a senior Labour source also noted that Mrs May had said repeatedly during the election campaign that if she lost six seats she would no longer be Prime Minister.
“If this exit poll is correct, her credibility is completely shot,” said the source.
If I lose just six seats I will lose this election and Jeremy Corbyn will be sitting down to negotiate with Europe: https://t.co/OwbfDseOJh
— Theresa May (@theresa_may) May 20, 2017
And as results began to unfold, bookmakers predictions of who would be the next prime minister at 3am placed Corbyn as the favourite to be in Downing Street.
— Richard Frediani (@FredianiITV) June 9, 2017
Mr Corbyn posted on Twitter that “whatever the final result, our positive campaign has changed politics for the better”.
Whatever the final result, our positive campaign has changed politics for the better. pic.twitter.com/EHLta2rnIW
— Jeremy Corbyn (@jeremycorbyn) June 9, 2017
Asked what Labour would do if the exit poll proves to be accurate, Shadow foreign secretary Emily Thornberry told Sky News: “We will see what happens next but if the Labour Party is called on to provide the next government, we will do so and do it in a unified way under a popular manifesto… with a leader who is strong.”
Christmas has come early for George Osborne, it appears. pic.twitter.com/OccqoXDRhm
— Jim Pickard (@PickardJE) June 8, 2017
Despite the potential need for deals between the parties, many have ruled them out.
Instead, Labour, the Lib Dems and the SNP have spoken about the possibility of a minority administration being propped up on a vote-by-vote basis.
Even with the support of Northern Ireland unionists, the Conservatives would struggle to form a viable administration without reaching out to other parties.
Meanwhile, a so-called “progressive alliance” bringing together Labour, Liberal Democrats, the SNP, Plaid Cymru and Greens would fall short of an absolute majority and produce a total only a few seats larger than the Tories on their own.
The one combination which would creep over the crucial 326 mark would be a repeat of the 2010 Tory-Lib Dem coalition – something Lib Dem leader Tim Farron has ruled out in the past.
And tonight former Liberal Democrat leader Menzies Campbell reinforced the message, telling BBC News: “Tim Farron made it very clear, he said no pact, no deal, no coalition.
“We’ve had our fingers burned by coalition, I don’t need to tell you that, so I find it very difficult to see how Tim Farron would go back on what he has already said and indeed to persuade the membership of the Lib Dems that a coalition was a good idea from our point of view.”
Former chancellor George Osborne said the exit poll indicated a “catastrophic” night for the Conservatives and it was difficult to see how the Tories would put together a coalition to stay in office.
“But equally it’s quite difficult to see how Labour could put together a coalition,” he told ITV.”It’s on a real knife-edge.”
Martin Trepte, the Editor of the Maidenhead Advertiser, which is the local newspaper in Theresa May’s constituency, told Yahoo News there was an “air of anticipation” at the count.
“There is certainly surprise in the room,” he said. “There is an air of expectation about what it could mean for the Maidenhead candidate. I really don’t know if she’ll go if the poll is accurate – it’s too early to say.”