With results from London delayed by vote counting in the referendum for an elected Mayor, the Conservatives looked set to gain around 200 seats outside the capital. Shortly after 1am, Labour held 72 councils - neither net gain nor loss. The Liberal Democrats were five councils down at 12. The Tories were two up at five.
Labour was 100 down in net seats, the Tories were up 183 seats and the Liberal Democrats were down 78 seats.
Overall, Labour lost one council outside London - Cambridge - but balanced it by gaining control of Hastings from the Liberal Democrats. Labour also hoped to win Brent, in London, from no overall control, and predicted it would hold on to control of Croydon and make gains in Brent, both of which were key Conservative targets.
The Liberal Democrats fared worst in terms of the numbers of councils they controlled outside London. They were jubilant at taking control of Liverpool but lost the Isle of Wight, West Lindsey, Rochford, Woking, Colchester, Craven and Hastings.
However, the Liberal Democrats were delighted to win the seat of the Sheffield Labour council leader, Mike Bower, and were also hoping to make gains in Labour-controlled Islington and Camden.
Celebrating the Liverpool win, the Liberal Democrat leader, Paddy Ashdown, said: "This is a huge success for the Liberal Democrats and a huge relief for the people of Liverpool. To add to all our local government successes, we now run for the first time a metropolitan city council."
The Conservatives won control of Tunbridge Wells and Runnymede from no overall control, and looked likely to hold on to London boroughs which they still controlled. They were pleased with their performance in Wandsworth, where they gained five extra seats to consolidate their control of the council.
Norman Fowler, the Conservatives' spokesman for environment, transport and the regions, said his party's gains were encouraging.
"By any stretch of the imagination this is getting to be a good and encouraging result... Step by step you are seeing the recovery of the Conservative Party," he said.
Hilary Armstrong, the local government minister, said she was very disappointed by the low turn-out and would work to improve it in future elections.
"I have been arguing about low turn-outs ever since I became minister and today is a great disappointment. But that vindicates the determination of the Government to modernise local government," she said.
There was bad news for Labour in some of the constituencies of the party leadership, though. As well as seeing Liberal Democrat gains in Islington, Labour lost four seats in John Prescott's home town of Hull and an equal number in Peter Mandelson's Hartlepool constituency.Reuse content