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Cameron and Clegg on the ropes after Labour poll blitz

Conservatives and Liberal Democrats were licking their wounds this morning after voters dealt the coalition Government a stinging rebuke, handing big gains to Labour in mid-term local elections across the country.

Key councils such as Southampton, Birmingham, Plymouth, Reading, Norwich, Thurrock and Harlow fell to Ed Miliband's party, as Labour made inroads into the South of England, while Prime Minister David Cameron suffered the embarrassment of losing seats in his Witney constituency to Labour.

With around half of votes counted, Labour had racked up more than 470 new seats and looked set for overall gains of more than 700, while the Tories looked likely to lose more than 350 seats and the Liberal Democrats around 200.

Liberal Democrat leader Nick Clegg said he was "really sad" at his party's results but insisted they would "continue to play our role" in Government dealing with the economic crisis.

Speaking outside his London home, the Deputy Prime Minister said: "I am really sad that so many colleagues and friends - Liberal Democrat councillors, who have worked so hard, so tirelessly for so many years for communities and families in their local areas - have lost their seats and I want to pay tribute to all the great work they have done.

"I am determined that we will continue to play our role in rescuing, repairing and reforming the British economy.

"It's not an easy job and it can't be done overnight but our duty is to boost jobs and investment and to restore a sense of hope and optimism to our country."

Foreign Secretary William Hague sought to play down the scale of the Conservative losses.

"These results - while it is never a good feeling to lose councillors - are well within the normal range of mid-term results for governments and I think not so good for the Opposition who are not getting 40% of the vote," he said.

"You wouldn't look at this and say Labour was on track to win a general election at all."

But Labour deputy leader Harriet Harman said the results were "very encouraging".

"We are back in touch and we are making progress. These are undoubtedly encouraging results. We are not crowing about them but they are very encouraging."

A BBC projection of the national vote share gave Mr Miliband's party 39% - up three points on a year ago. The Tories were down four on 31% and the Lib Dems trod water on 16%.

In a further blow to Mr Cameron, Manchester, Nottingham and Coventry ignored his pleas and rejected proposals for elected mayors. Birmingham and other cities are expected to follow suit.

However, Mr Miliband did suffer a setback in Bradford, where his party lost seats to George Galloway's Respect party.

Tories pointed to a low turnout, estimated at little over 30%, suggesting that "apathy" had played a significant part in the results.

But there were also calls for a change in direction from the leadership on issues like gay marriage and reform of the House of Lords.

Senior backbencher Bernard Jenkin insisted the party had to focus on the economy rather than allowing their Lib Dem coalition partners to dictate the agenda.

"The coalition is going to look completely stupid if it follows through on Lords reform," he told the BBC.

Defence Minister Gerald Howarth said: "There are issues, for example, like the proposals for gay marriage. A lot of Conservatives have written to me saying 'I am a lifelong Conservative, there is no mandate for this, why is this being proceeded with?"'

And Tory MP Gary Streeter said party supporters were "gagging" for some more traditional right-wing policies in areas such as law and order.

Mr Hague hinted at frustration within Conservative ranks over the restraints imposed by the need to work in coalition with the Lib Dems.

"Of course the Conservatives can't do everything that we would like to do in government because we are in coalition within the Liberal Democrats," he said.

"Of course it is what we will be fighting for in the next general election in 2015."

But Lib Dem president Tim Farron said Tories would be "bonkers" to respond to their setback by swinging to the right.

He told the BBC Radio 4 Today programme: "It was almost amazing that the Tories managed to not win the 2010 general election but the thought that they would somehow build themselves up to a majority by lurching to the right to try and bring back people they think they've lost to Ukip - in so far as anyone in the Tory Party should take political and strategic advice from me, can I just advise them that would be bonkers."

Some 5,000 seats were at stake on 181 local councils across England, Scotland and Wales.

Most were last up for grabs in 2008, when the Conservatives made significant gains.

Around 1,200 are in Scotland, where Labour is expected to find it tougher to make inroads against the SNP and where counting was only beginning this morning.

The remainder of the 10 cities holding referendums on elected mayors will reveal their results later.

On a gloomy day for his party and the coalition Government, Mr Cameron will be hoping for the silver lining of victory for Tory Boris Johnson in the London mayoral election, with results announced this evening.

An eve-of-poll survey for the Evening Standard suggested that Mr Johnson is set for victory over Labour's Ken Livingstone, by a margin of 53% to 47%.

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