* Liberal Democrat Clegg basks in TV debate victory
* Upstages frontrunner Cameron, Prime Minister Brown
* Poll shows party gaining ground on larger rivals
(Adds details of poll)
By Estelle Shirbon
MANCHESTER, England, April 16 (Reuters) - Britain's historic TV debate between the candidates to be prime minister gave a boost to little-known outsider Nick Clegg, whose Liberal Democrats on Friday claimed a breakthrough.
More than 10 million people watched at least part of Thursday night's live debate, a first in Britain and a defining moment in the campaign ahead of a nationwide election on May 6. Clegg was judged the winner in several instant polls of viewers.
Numerous media commentators, as well as the Liberal Democrats, said the debate had ushered in a new era of three-party national politics in Britain -- and a whole new challenge for the fresh-faced Clegg, 43.
"Now that we've made this a three-horse race rather than a two-horse race, they're going to be coming for us, we know that. We've got to be ready for it," said Paddy Ashdown, a former Liberal Democrat leader, speaking on BBC television.
Prime Minister Gordon Brown of the Labour Party and Conservative leader David Cameron, the frontrunner in the election, would be much tougher on Clegg during the next two TV debates, on international affairs and the economy, Ashdown said.
A ComRes survey for ITV News put national support for the Lib Dems up three points on 24 percent, behind the opposition Conservatives on 35 percent and ruling Labour on 28 percent. [ID:nLDE63F1GL]
It was the highest score for the LibDems in a ComRes poll since the last election in 2005.
The Lib Dems are a centrist party who have pushed for tough action to break up banks and for a 10 percent levy on banking profits and tax breaks for the poorest. [ID:nLDE63D0YU]
BALANCE OF POWER
Most polls since January have pointed towards a "hung parliament" in which no party has an overall majority of seats, an outcome not seen in Britain since 1974 and dreaded by many in the financial markets who would prefer a clear Conservative win.
Sterling weakened on Friday on the prospect that more voters may be tempted by the Lib Dems. [ID:nLDE63F0VT]
"Markets will likely see the outcome of last night's pre-election TV debate in the UK as increasing the possibility of a hung parliament without in any way being decisive," Alastair Newtown at Nomura said.
The Lib Dems perennially are relegated to a distant third in British elections because its voting system favours the two larger parties that have been alternating in power since World War Two.
Brown, 59, is campaigning for a record fourth term in office for Labour, while Cameron, 43, is fighting to take his party back into office after 13 years in opposition.
Brown, whose best chance of clinging to power may be a hung parliament and an alliance with the Lib Dems, tried during the debate to be hard on Cameron and soft on Clegg, suggesting that Labour and the Lib Dems agreed on many issues.
"I agree with Nick" became a catchphrase after Brown used it seven times. Clegg was having none of it, though, attacking Brown for what he described as 13 years of failure.
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(Editing by Michael Roddy)