Labour is taking a bruising in elections in Scotland, Wales and England - but Tony Blair's party appears to have escaped the battering some were predicting.
In Scotland, the Scottish National Party is taking seats but is still far from certain of replacing Labour as the largest single party.
Labour is on the way to remaining the largest party in the Welsh Assembly but looks unlikely to claim overall control.
In England, the Tories increased their tally of councils by 12 and claimed the scene had been set for general election victory.
Sky News' Chief Political Correspondent Jon Craig said: "If there is some relief in Labour circles and optimism among the Conservatives, there will be gloom among Liberal Democrats at what looks like being a dismal performance by their party."
The electoral commission has said it will investigate the electronic voting system used in Scotland after as many as 100,000 ballot papers were spoilt.
Scottish National Party leader Alex Salmond was returned to Holyrood, defeating the Lib Dems in Gordon.
David Cameron's Tories won control of England's largest council, Birmingham, and claimed they were "back in business in the north" after taking Chester and South Ribble.
But Labour said the much-vaunted "Cameron effect" had failed to deliver the predicted surge in support and insisted the Tories had not made the sort of breakthrough they would need to win the next general election.
It appears to have been a bad night for the Liberal Democrats.
Sir Menzies Campbell's party made some high-profile progress but lost more than 100 councillors and saw key southern councils like Bournemouth and Torbay fall to the Tories.
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