Not sure I follow the cake analogy, it sounds like you are saying that the largest party is having it's votes redistributed?
Also, Prime Minister not President of what country?
In STV, the vote is for individual (who may or may not be a member of a party) not party. In an election with only one seat, STV is equivalent to what is called an Instant Runoff, which sounds like what you are describing.
In this case, with only one seat in play, you would likely have each party field a single candidate, so in this instance the distinction between voting for an individual and a party disappears, and this sounds like what you are describing.
But even in this case, it is the party (or individual candidate) with the least votes who gets their votes redistributed to their 2nd preference.
In your cake analogy, if it was split A=49%, B=41% and C=10%, the C party with 10% would have it's votes redistributed, likely giving the win to A, unless all the C voters put the B party as their 2nd pick.