Ed Miliband today declared that Labour was "winning back people's trust" after a night of big gains in mid-term local elections across the country.
Miliband's party took control of a series of key councils including Southampton, Birmingham, Plymouth, Reading, Norwich, Thurrock and Harlow.
Prime Minister David Cameron - who suffered the embarrassment of losing seats in his Witney constituency to Labour as it made inroads into the Conservative heartlands of southern England - blamed the setbacks on the tough economic climate nationally, but insisted he would continue to take the "difficult decisions" needed to deal with Britain's debt.
With around half of the votes counted, Labour had won control of 22 councils, racked up around 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 about 200.
Speaking outside his London home, Mr Miliband said: "We are a party winning back people's trust, regaining ground, but there is more work to do.
"I know that David Cameron promised change and has disappointed people. I am determined that we can deliver Britain the change it needs.
"People are hurting. People are suffering from this recession, people are suffering from a Government that raises taxes for them and cuts taxes for millionaires. I think that's what we saw last night."
Mr Cameron paid a visit to Conservative campaign headquarters in London to thank party workers.
"I am sorry for all the hard-working Conservative councillors who lost their seats, obviously against a difficult national backdrop," said the Prime Minister. "These are difficult times and there aren't easy answers.
"What we have to do is take the difficult decisions to deal with the debt, deficit and broken economy that we've inherited and we will go on making those decisions and we've got to do the right thing for our country."
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.
"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," said the Deputy Prime Minister.
"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."
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.
And Mr Cameron looked set to reap at least one victory in London, with early counting in the mayoral election showing Conservative Boris Johnson running well ahead of Labour rival Ken Livingstone in the race for City Hall.
Tories pointed to a low turnout, estimated at little over 30% nationwide, suggesting that "apathy" had played a significant part in the results.
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 there were also calls from the Tory backbenches 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 - insofar 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 announce their results later.
Mr Miliband was expected today to visit not only cities including Birmingham where Labour won control in yesterday's elections, but also Worcester, where it picked up three new councillors but failed to overtake the Conservatives as biggest party.
A senior Labour source said the leader wanted to show he recognised the need to reach out to voters who have yet to place their trust in him.
"Ed knows there is more work to do to win people's trust, so today he will not just be visiting places where Labour won," said the source.
"He will also go to Worcester, which Labour did not win, to show people who did not vote for us or did not vote at all that Labour can change people's lives for the better."
Conservatives lost overall control of Worcester in yesterday's elections, which saw them losing one seat, while Liberal Democrats lost one and both independent councillors were defeated. The new council will have 17 Tory members, 15 Labour, two Lib Dems and one Green.
With results available from 122 councils, the state of parties is:
Party; Total; Change in Seats; Net change
councils control won in seats
C 42 -12 999 -394
Lab 73 +30 2,055 +769
LD 6 -1 407 -306
PC -1 131 -30
SNP 2 +2 402 +53
Green 40 +11
R 22 +6
Lib 4 -6
Ind CHC 5 +3
Ind 5 -2 537 -139
Respect 5 +5
Eng Dem -2
Llais 13 +3
NOC 50 -16