A bad night, says Brown after losing 333 councillors

With results available from 157 councils, the state of parties is: <br/> Councils: Con +12, Lab -9, Lib Dem +1; <br/> Councillors: Con +260, Lab -333, Lib Dem +34

Gordon Brown promised today to “listen and lead” after the Labour Party suffered its worst local election results for 40 years.

In his first elections as Labour leader, Mr Brown saw his party come a humiliating third behind the Conservatives and Liberal Democrats. With results in two thirds of the 159 councils in England and Wales holding elections known, Labour’s projected share of the national vote was 24 per cent – two points below its recent low in 2004 when Tony Blair was hit by a backlash over the Iraq war.

The Conservatives won an estimated 44 per cent share of the vote, allowing them to claim they were on course for a general election victory. David Cameron today hailed the results as “a big moment” and “a positive vote of confidence” in the Tories. But he warned his party against complacency.

Labour was also bracing itself for another major setback in the election for London Mayor, with sources predicting that Ken Livingstone would be defeated by his Tory opponent Boris Johnson. The result will be announced this evening.

Mr Brown refused to concede that Ken Livingstone had been defeated in the London Mayoral race. However, he did appear to hint that he agreed with other Labour insiders - who believe their candidate is likely to have lost - by thanking Mr Livingstone for what he had done for London over the past eight years.

"I spoke to Ken Livingstone last night. I congratulated him on his campaign and what he had done to secure the Olympics for London, what he had done for transport in London and what he has done to improve policing in London, and what he was doing for affordable housing in London - all these issues that Ken Livingstone has raised as mayor."

Speaking in Downing Street, Mr Brown admitted that Labour had suffered a “bad night.” He said: “My job is to listen and to lead. We will learn lessons, we will reflect on what has happened and then we will move forward.”

The Prime Minister pledged that the Government would steer the country through difficult economic times, and prepare for the upturn and prosperity that would follow. “The test of leadership is not what happens in a period of success but what happens in difficult circumstances,” he said. He accepted that he needed to show “strength and resolution as well as the conviction and ideas to take the country forward”.

But as the inquest into Labour’s mauling began, some Labour MPs called for a change of direction. Tony Lloyd, chairman of the Parliamentary Labour Party, said the voters had sent a "very clear signal" to Labour in a "referendum on where the Government stands". He said the row over the 10p tax change had hurt Labour.

The Tories seized control in Southampton, Bury, Harlow, Maidstone, Nuneaton and Bedworth, Wyre Forest West Lindsey, North Tyneside and the Vale of Glamorgan and have gained more than 200 seats. Labour, which also lost control of Wolverhampton and Reading, lost more than 300 seats and its support appears to have fallen most heavily in its traditional heartlands, where the abolition of the 10p income tax rate damaged their prospects.

Nick Clegg passed his first test as Liberal Democrat leader by pushing Labour into third place. He said today: “It is a very strong result. We have increased the number of councillors when I was being told for the last several weeks that we were almost certainly going to lose councillors. We have outpolled Labour for only the second time in our party's history, and crucially we have been winning against both Labour and the Conservatives."

A jubilant David Cameron today hailed a "vote of positive confidence" for the Tories as Labour plunged to their worst local election results for a generation.

The Conservative leader said it was a "very big moment" for his party on the long road back to back to power at Westminster as projections showed Labour crashing to third place in the popular vote.

"I think these results are not just a vote against Gordon Brown and his Government. I think they are a vote of positive confidence in the Conservative Party," he told reporters as he left his west London home.

"I think this is a very big moment for the Conservative Party, but I don't want anyone to think that we would deserve to win an election just on the back of a failing Government.

"I want us to really prove to people that we can make the changes they want to see. That's what I'm going to devote myself and my party to doing over the next few months."

Labour's margin of defeat was similar to the drubbing received by John Major in council elections in 1995, two years before he was ejected from Downing Street by Tony Blair.

The Tories would enjoy a landslide Commons majority of between 138 and 164 seats if the results were repeated in a General Election.