Voters hand Labour beating at polls

While avoiding the meltdown some had been predicting, the party lost hundreds of councillors, was overtaken by Nationalists in the Scottish Parliament and saw its Welsh Assembly representation shrink.

Tory leader David Cameron hailed "a real breakthrough" for the Tories, whose councillor gains sailed past 800 on Friday afternoon, including in key northern areas.

But Labour officials insisted that the Tories had "flatlined" as the BBC revised their projected vote share down to 40%, the same as last year's elections. Labour's vote share has apparently increased to 27%, up one point on last year, while the Liberal Democrats were down a point to 26%.

The Prime Minister said the results provided "a perfectly good springboard" for Labour to win the general election expected in 2009 or 2010. Gordon Brown, who is expected to take over as Prime Minister this summer, resolved to "listen and learn".

The elections were marred by delayed results because of new systems and technical glitches, prompting the Electoral Commission to launch an official inquiry into voting chaos in Scotland. Confusing ballot papers were blamed for as many as 100,000 invalid votes in elections to the Scottish Parliament and councils north of the border.

In Scotland, the Scottish National Party became the biggest party in Holyrood for the first time, winning 47 seats to Labour's 46. SNP leader Alex Salmond will now try to form a coalition executive.

Labour remained the biggest party on the Welsh Assembly, but leader Rhodri Morgan said the party - which has been in charge of a minority administration - would now have to find a coalition partner after losing three seats.

But Labour's projected losses of seats in English councils were likely to fall short of the 650-750 predicted by some observers. With results in from 324 councils, the Tories had won 856 new seats and taken control of another 38 councils. Labour were down 465 councillors, losing control of eight councils. The Lib Dems lost 243 councillors while five town halls left their grasp.

On a hastily-arranged visit to Chester, Mr Cameron said: "We are now the party of the whole country, winning in every part of the country, winning against Labour, winning against the Liberal Democrats." But Mr Blair said it had been "a dreadful set of results" for the Liberal Democrats and the Tories "have not broken through" in the way they wanted.