British Prime Minister Mr Tony Blair urged his party to keep its nerve last night after voters gave him and his government "a kicking" in seeming protest over the war in Iraq. Chancellor Gordon Brown rallied senior ministers behind Mr Blair, insisting Labour would go on to win the next general election under his leadership, writes Frank Millar in London.
At the same time Labour hopes that the Conservatives will suffer their own "bad news day" following tomorrow night's declaration of Britain's European election results were boosted by the strong performance of the United Kingdom Independence Party (Ukip) which won a surprising 115,665 votes in the London mayoral election.
Labour crashed to a humiliating third place behind the Liberal Democrats in Thursday's local elections in England and Wales, losing more than 460 council seats and control of eight councils, including Newcastle, Leeds and Swansea.
With only a few results still to be declared, the Conservatives were the clear winners with a projected 38 per cent of the votes cast, with the Liberal Democrats taking 29 per cent and Labour on 26 per cent. The outcome is believed to be unprecedented for a governing party in a mid-term poll and Labour's worst local government performance since early in the last century.
With turnout close to 40 per cent, the Conservative leader Mr Michael Howard claimed his party was now represented across the country and poised to fight a successful general election campaign. However, the Conservatives failed to register any inner city breakthrough and with Labour's losses going two ways, the Liberal Democrat leader, Mr Charles Kennedy, hailed the arrival of "three-party politics writ large".
Ironically the only good news for Mr Blair on a dismal day for Labour was the re-election of London Mayor Mr Ken Livingstone, who has said President Bush should be tried for "war crimes". Mr Livingstone had to await a second count before winning a handsome 161,000 majority over his nearest Conservative challenger Mr Steve Norris.
Having seen his own first preference vote fall by three points, Mr Livingstone resisted suggestions that he would have performed better had he remained an independent and not rejoined Labour earlier this year.
And he loyally echoed Mr Brown's insistence that Labour would "win the general election with Tony Blair", while expressing the hope that it would be fought on a "traditional" Labour agenda.
Mr Blair set the tone for Labour's damage limitation strategy while in Washington for the funeral of former US president Ronald Reagan, admitting that "Iraq, and worries over Iraq have been a shadow over our support". His deputy, Mr John Prescott, conceded Iraq had been a major factor in the party's performance, while insisting the general election would be fought and won on domestic issues.
"People like those (domestic) policies," he told the BBC: "But they didn't judge this election on that. Iraq was a cloud, or indeed a shadow, over these elections. I'm not saying we haven't had a kicking. It's not a great day for Labour."
However, last night Mr Brown rejected questions about whether he might have handled Iraq differently, stressing that the decision to go to war had been taken collectively by the cabinet, approved by parliament, and backed at the time by the majority of the British public. Mr Brown said: "We have a policy agenda for the future on health, education and the economy - and by the time it gets to the general election these are the issues on which people will want to decide the future of the country."