Transfers from MEP Jim Allister's new hardline unionist group helped seal the shock DUP defeat in Northern Ireland's first election test since the return of power-sharing at Stormont.

Former First Minister and UUP leader, David Trimble, described the victory as "a total vindication of the efforts we made over 10 years to improve the lot of the people in Northern Ireland".

The UUP retained the Banbridge Council seat - vacated by the resignation of former Irish rugby international Tyrone Howe - by less than 70 votes.

The DUP finished ahead in first preference votes, but their candidate, Paul Stewart, was overhauled by Carol Black of the UUP when votes were transferred.

Mr Allister's fledgling Traditional Unionist Voice took almost 20% of the first preference votes, finishing third, and their transfers to the UUP ended up eliminating the DUP.

A jubilant Mr Allister said: "It's a very unhappy St Valentine's Day for the Chuckle Brothers."

As the shock result was relayed to DUP leader Ian Paisley, attending the second meeting of the British Irish Council since devolution in Dublin, senior party figures conceded they will have to carry out a rethink.

The result represents a sizable blow for the DUP which had up to half the vote in the last election in the Dromore area.

DUP Executive Minister, Edwin Poots, said: "This is an Ulster Unionist seat and the win was by a very fine margin, but there's no doubt there is an underlying level of discontent.

"There was an element of a protest vote, but having said that the vast majority of unionist voters did transfer their votes so we do not regard those people as lost to us. There are people who still obviously have to be convinced."

UUP deputy leader, Danny Kennedy, described the result as "a St Valentine's Day massacre for the DUP".

"This is a superb result for the Ulster Unionist Party. We were discounted, overlooked and sidelined but now the people have spoken," he said.

Lord Trimble said he was "delighted but not really surprised" by the result.

"The fact is that DUP have embraced the policies we espoused - the same policies for which they vilified the UUP before they finally grasped power," he added from the House of Lords after the Belfast Telegraph informed him of the outcome of the by-election.

"The people of Northern Ireland have watched Ian Paisley and his party embrace Republicans after so much criticism of the UUP who laid the foundations for a better Northern Ireland.

"Of course, we did business with Sinn Fein and SDLP, but we did it in a quieter and more unobtrusive manner.

"The result of this by-election is proof that we are right. DUP have not been able to fool all the people all of the time.

"The fair showing of Jim Allister's group does not surprise me, but the bottom line is that the majority of people do not want to return to the old way.

"This, of course, could - and should - be a springboard for UUP to regroup and rebuild."