So exactly who did win in the local elections?

In public, all the parties claimed a victory of sorts. In private, Tony Blair, Iain Duncan Smith and Charles Kennedy all heaved a sigh of relief because it could have been far worse for each of them.

It was Mr Duncan Smith who had the most to lose from Thursday's local elections in England – his job. As the polls closed, Crispin Blunt tried to light the touchpaper for a leadership challenge by resigning from the Tory front bench.

By quitting before the results were known, Mr Blunt tried to prevent the Tories "spinning" them as a great triumph. He certainly made his party's task harder, but his gambit failed. No other MP joined his clarion call for a rebellion. There was no co-ordinated plot, as Mr Duncan Smith's allies had feared.

The Tories, who had set themselves a deliberately low target of gaining between 200 and 300 seats, managed more than 550. The "expectations game" meant that Tory MPs judged Mr Duncan Smith had done enough to win a reprieve – for now, at least.

The smile on the Tory leader's face was real when he arrived at Conservative Central Office to proclaim what he called a "fantastic and spectacular" victory. In electoral terms, it was nothing of the sort but, for Mr Duncan Smith, survival was a victory which tasted sweet enough. More sensible Tories know they should have done much better. They won 35 per cent of the votes in England, less than William Hague when the same seats were fought four years ago.

The reality is that Mr Duncan Smith will need 42 per cent to become Prime Minister. So he should have been looking for 1,000 gains on Thursday.

Although Tory MPs kept their heads down yesterday, many of them still share Mr Blunt's withering assessment of the party's prospects under Mr Duncan Smith, who is not out of the woods yet. It would take only a small mistake – a botched reshuffle in July, for example – to provoke another leadership crisis.

So Mr Duncan Smith is still on probation. One reason why his MPs did not trigger an immediate vote of confidence is that Kenneth Clarke did not encourage his followers. The former chancellor does not think he would win a leadership election now. But he suspects he might win next year. So Mr Duncan Smith will need to show real progress over the next 12 months.

Mr Blair would have preferred to have ceded fewer than 800 seats but will not lose too much sleep. The Blunt episode was a gift to Labour, literally blunting the impact of the Tory gains and taking the spotlight away from the Government's performance. If voters had a message for Labour, it was that they want to see a return on their investment in public services. This will be Mr Blair's biggest challenge in the year ahead. But ministers fear people will not really notice any improvement in the National Health Service; they will certainly notice if teachers are sacked – as some will be.

Despite predictions of a "Baghdad bounce", if anything Labour suffered a "Baghdad backlash", particularly among Muslim voters. The war also weakened its campaign effort, as many party members sat on their hands in protest.

The Liberal Democrats proved again that they are good at campaigning. They matched Labour's share of the vote at 30 per cent and managed their best performance in local elections, gaining more than 180 seats. Mr Kennedy could hail an "excellent result" which, he rightly said, would send shivers down the spines of some Tory MPs. Liberal Democrat fears that they would be damaged by their stance on the war – which shifted from opposition to "backing our boys" once they went into action – failed to materialise.

Labour was relieved to see off the threat from nationalist parties in Scotland and Wales. The party lost six seats in the Scottish Parliament but is expected to re-form a governing coalition with the Lib Dems. In Wales, Labour did much better, winning half the 60 seats in the Cardiff assembly, and will try to govern without the Lib Dems.

Those with most cause for celebration were the smaller parties, who tapped a strong "anti-politics" sentiment. The left-wing Scottish Socialists boosted their numbers in Edinburgh from one – the poll-tax rebel Tommy Sheridan – to six. The proportional representation system also allowed the Greens to grow from one to seven MSPs, and they also hold 53 seats on English councils.

On a day when only one in three eligible voters bothered to turn out, independent candidates also made their mark. They even won overall control in Mansfield. The British National Party won 11 more seats in England, taking its total to 15. In Burnley, it is now the second largest party with eight seats. "They are spreading like a cancer across the country," said Shahid Malik, a member of Labour's national executive.

So who really won? If there has to be one winner, it was Mr Blair. There is no apparent threat to him winning a third term, and he will be as happy as Mr Duncan Smith that the Conservative leader remains in his post.