Sinn Fein won the Donegal South West by-election in a blow to Ireland's crisis-hit government.
The party's candidate Pearse Doherty was declared the victor after four counts having initially seized more than 39% share of the vote after a 56% turnout.
The result does not immediately threaten government plans to pass a tough budget aimed at saving the crippled economy but the loss for Fianna Fail raises the political temperature.
Mr Doherty said his win showed the increasing public opposition to the austerity budget and the multi-billion euro bailout planned for Ireland.
He said: "The clear message here is that this government needs to get out of office. And it is not too late for the other parties who claim to care about the disadvantaged in our society to join Sinn Fein in creating a real alternative.
"This government is in denial. It was in denial last week over the arrival of the IMF. It is still in denial. This is the start of a new beginning in Irish politics."
Voters went to the polls on Thursday after the psychological blow of the International Monetary Fund (IMF) arriving in Dublin as it became clear the state's finances were crippled.
Only 24 hours prior to polling day, Taoiseach Brian Cowen unveiled his four-year plan for national recovery, which mapped out drastic measures, including three billion euro in social welfare cuts, a rise in tax and the axing of 25,000 public sector jobs. An austerity budget is planned for December 7.
Fianna Fail, the main party of government, had thrown major resources at the contest but saw its vote halved from 50% in 2007 to just 21%.
However, Fianna Fail Minister Eamon O Cuiv said his party polled better than many would have expected following a black week in Ireland's political history. "The bigger picture is that if you study the (larger) opposition parties, they did not make the huge gains predicted," he said.