The by-election in the Hillrise ward was caused by the death of a Labour councillor. The Liberal Democrat candidate, Paul Fox, beat Labour's Adrian Pulham, giving the Liberal Democrats overall control of the council with 27 seats against Labour's 25.
Islington, in north London, where the Prime Minister and his family lived in a pounds 500,000 house before he won office, had been under Labour control for 25 years, and was a symbol of New Labour. Former Labour leaders on its council included the arch-moderniser Margaret Hodge, now a minister in Mr Blair's government.
Stripped-pine town houses, attracted professionals and media types and gave Islington a distinctive image for Mr Blair's Nineties Labour politics. But the council faced a backlash from local voters and serious disenchantment among parents over its bad record on schools: standards were judged to be among Britain's worst and a private company was brought in by the Government to take over some of the schools.
Charles Kennedy, leader of the Liberal Democrats, hailed his party's victory in the by-election as a "triumph for the people of Islington... Liberal Democrats are winning all over the country in inner cities as well as rural Britain.
"[We] have beaten Labour in Liverpool and Sheffield, and now in Islington. Labour's brand of municipal socialism is not working and throughout the country, people are turning to the Liberal Democrats to clean up the mess left by years of Labour incompetence."
Hillrise voting was: Liberal Democrats 1,317; Labour 695; Greens 60; Parents Against Privatisation 39; Tories 33.
Labour traditionalists in the Government will be offended by Mr Kennedy's triumphalism, only three days after his first joint consultative meeting in the cabinet room with Mr Blair. Critics of Mr Blair's closer links with the Liberal Democrats are certain to call for the ties to be broken. The Prime Minister is determined to continue the link between the two parties, but any hope of persuading Labour to accept proportional representation in local government - the price Mr Kennedy is demanding for continued co-operation - could be killed.Reuse content