The sterling currency, bonds and shares surged on a result that reversed near-universal expectations of an inconclusive "hung parliament", in which Cameron would have had to jockey for power with Labour rival Ed Miliband.
               
Instead, Cameron met Queen Elizabeth at Buckingham Palace to accept a mandate to form the first majority Conservative government since John Major's surprise victory in 1992.
               
Despite the unexpectedly decisive outcome, longer-term uncertainty looms over whether Britain will stay in the European Union - and even hold together as a country. Secessionists swept the board in Scotland, and Cameron repeated a promise to hold a referendum on membership in the EU.
               
The scale of Cameron's victory surpassed even his party's most optimistic projections.
               
"This is the sweetest victory of all," Cameron told enthusiastic supporters at party headquarters. "The real reason to celebrate tonight, the real reason to be proud, the real reason to be excited is we are going to get the opportunity to serve our country again."
               
Smiling beside his wife Samantha, Cameron returned to the prime minister's office in Downing Street after meeting the Elizabeth II. Downing Street staff lined up to applaud when he entered the residence.
               
Cameron's pitch to voters was that he had rescued Britain from economic crisis to deliver the fastest growth among major economies. He had warned that Labour's Miliband would cripple the United Kingdom by giving Scottish nationalists the keys to England's treasure.
               
Miliband, a self-confessed socialist "geek", had argued that the recovery was benefiting the rich and most people were still worse off. But he failed to connect with working class voters or convince the public he could be trusted with the world's fifth largest economy. He phoned Cameron to concede and then resigned as party leader.
               
With just one seat left to declare in the 650-seat house, the Conservatives held 330 and Labour 232. The centre-left Liberal Democrats, who supported Cameron in government since 2010, were all but wiped out, reduced to eight seats from 57.
               
Scottish nationalists won 56 of the 59 Scottish seats, up from just six five years ago.
               
The anti-EU, populist UK Independence Party (UKIP) surged into third place in the overall vote tally, but disappointed its followers by managing to place first in only one district to win just a single seat. Like Labour's Miliband, Lib-Dem leader Nick Clegg and UKIP leader Nigel Farage resigned as party leaders.
               
Sterling gained more than 2 cents against the dollar to rise above $1.55 for the first time since late February, and looked on track to enjoy its biggest one-day gain against the euro since January 2009.
               
The FTSE 100 stock index was up 1.45 percent at 6985, approaching a record high set last month. The price of British government bonds also rose.

Latest News from World News Desk