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Gordon Brown saw his party lose 331 councillors and nine councils on 1 May, while David Cameron's Conservative Party celebrated 256 new council seats.

In the end, the Tories took 44 per cent of the vote, the Lib Dems 25 per cent and Labour ended in third place with just 24 per cent.  

Brown did not stay up to watch the results come in, but said, "It's clear to me that this has been a disappointing night, indeed a bad night for Labour. My job is to listen and to lead and that is what I will do."

The Tories were quick to reject any suggestion that protest votes were at the heart of Labour's problems, rather than a sudden preference for Cameron's revamped "nasty party". 

Cameron said that the results looked improved his party's prospects for a general election, expected at the latest in 2010, but warned his supporters against complacency. 

Labour chief whip Geoff Hoon told reporters that there was "no crisis" in the Labour ranks, adding that any politician courageous enough to take difficult decisions could not expect to win a popularity contest.

"This isn’t something that’s going to affect the fundamental stability of the Government," Hoon added.

His remarks did little to quieten Labour backbenchers, some of whom gave Brown just six months to make amends. 

Many said openly that the party's leadership had lost touch with core voters, in particular in the south of England and in Wales, who felt alienated by the abolition of the 10p tax rate. 

Rebel Labour MP Derek Wyatt said, “How many more Northern Rocks can there be? Look at the situation with fuel prices, the non-doms and the 10p tax band. Gordon has committed spectacular own goals and the public is punishing him for it.”

Anne Begg, Labour MP for Aberdeen South, told the Scotsman newspaper, "What happened over the 10p income tax is quite illustrative. I had people over 65 phoning my office saying 'why are you doubling my tax?' when in fact they will be better off as a result of the changes, as they will be taken out of the tax system altogether."

Even the usually gushing Cabinet minister Hazel Blears was lost for words trying to put a positive spin on the election results, stating, “Basically, the message is ‘Get a grip, sort things out’."

Ed Balls, one of Brown's closest allies and currently in charge of education but widely tipped as a future Chancellor of the Exchequer, admitted that rising taxes had been a recurring theme in discussions with voters throughout the election campaign.

“They think that their tax bills are going up, that their fuel prices are going up, that their utility bills are going up and they want to know that we’re doing more to help them through difficult times and that we are on their side,” he said.

Deputy Labour leader Harriet Harman told the BBC's Today programme, "We didn't respond early enough to those groups of people who were going to lose out as a result of the change in the 10p rate which overall benefits lower income people but there were some people who lost out and we didn't react early enough."

By contrast, the Conservatives celebrated after doing well in traditional Labour strongholds in Greater Manchester, Lancashire and the North-East. 

Cabinet ministers Ed Balls, Jacqui Smith, James Purnell, John Hutton, Caroline Flint and Ruth Kelly could all lose their majority if this week's local election results were repeated in a general election.

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