Labour loses control of Nuneaton council as John McDonnell plays down hopes of key gains in London

'I don't think there are going to be big swings,' the shadow chancellor said. 'What we are looking for is incremental gains that will lay the foundations'

Labour has lost control of a key council in the Midlands as early indications suggested a mixed picture for both of the main parties in their biggest electoral test since the general election.

As results filtered in from across England in the 2018 local elections, both Jeremy Corbyn’s party and Theresa May’s Conservatives had both lost control of crucial councils.

Labour’s shadow chancellor, John McDonnell, also appeared to have lost hope of his party seizing the Conservative’s “crown jewels” of Wandsworth and Westminster in London.

"I don't think there are going to be big swings. What we are looking for is incremental gains that will lay the foundations,” he said.

London is the major battleground after recent polls pointed towards a substantial swing to Labour, with the party claiming it still had a "fighting chance" in Barnet.

But Sir John Curtice, the elections expert, suggested that the Conservatives could be experiencing a “small swing” from Labour outside of the capital.

“Probably on the early results the Conservatives are at least holding their own,” he said. “That frankly is in line with the message of the opinion polls”

He later added that key wards showed a modest 1.5 per cent swing from the Conservatives to Labour in the capital but a one per cent swing from Labour to the Tories outside of the capital.

Labour had more to celebrate in the north-west, however, as Trafford – a flagship Conservative council for 14 years – fell to no overall control following a sustained campaign by Labour and the left-wing group Momentum in the area.

And in Plymouth, the party had gained the council after the party had at least 29 out of the 57 seats on the council. It led to Jonny Mercer, the Conservative MP, placing blame for the party’s loss of the council with the government’s approach to defence spending.

"It's pretty clear to me the biggest factor in this city is defence," he said. "It always has been."

He added: "I've made very public my concerns around the handling of defence at the moment and what the vision is."

Sir Graham Brady, chairman of the party's 1922 committee of backbenchers, added on BBC News that it was “deeply disappointing” the party had lost Trafford.

But Conservative former party chairman Grant Shapps, who has been highly critical of Ms May's leadership, said No 10 and Tory headquarters had "got their act together".

He told BBC News: "Four years ago I was looking at a Conservative vote of 30 per cent in the polls and today I expect Theresa May will be looking at significantly more than that, I imagine in the upper 30s, maybe near 40."

In other parts of the country, Labour lost Nuneaton and Bedworth with the council falling to no overall control after the Conservatives gained seats while the Tories gained Basildon and Peterborough, which had both been under no overall control.

Support for Ukip has collapsed with the party winning just two seats nearly five hours into counting.

Dr Fox told BBC News: "It looks as though the places where Ukip did well are reverting to their previous party."

Elsewhere, the Liberal Democrat’s had claimed they had won Richmond council from the Conservatives, with the former MP Sarah Olney telling BBC News: "We are very confident, in fact we are going to call it. We think we are going to be taking control of Richmond council tonight."

Party sources were also quietly confident of seizing Kingston council from the Conservatives after losing the council in 2014 while in coalition with the party.

In total, more than 4,000 council seats were up for grab in some 150 council areas, including all 32 London boroughs and major metropolitan areas across the country such as Manchester, Leeds and Newcastle.

Most councils are counting votes overnight but others will declare results during the day on Friday.