Conservative MP Boris Johnson looked set to be crowned Mayor of London tonight barring a last-minute turnaround.
With four-fifths of the votes counted in the capital, Mr Johnson was ahead in eight of 14 areas with Ken Livingstone ahead in the remainder. Liberal Democrat Brian Paddick was polling third across the capital.
One bookmaker was so confident of a Tory victory it announced it would start paying out bets on a Johnson win hours before the official result.
Paddy Power said the "mauling" Labour had received elsewhere in England and Wales suggested the Conservative candidate was on his way to City Hall.
A defeat for two-term Labour incumbent Mr Livingstone would compound a torrid night for Gordon Brown in his first test at the polls as PM.
Projections of Labour's national share of the vote put the party on 24%, behind the Liberal Democrats.
For the Tories, a win for Mr Johnson would be the icing on the cake in a night of sweeping victories.
The party scored wins in councils across the country and saw its predicted national share rise to 44%.
Mr Johnson refused to claim victory ahead of the official announcement.
"I think the party's done fantastically nationally but London is a very different kettle of fish. We'll have to see what happens," he said.
Aides to Mayor Ken Livingstone insisted that he remained "optimistic" despite Labour's drubbing in the polls.
Prime Minister Gordon Brown - who spoke by telephone to Mr Livingstone last night - also refused to concede defeat.
However, he struck a valedictory note when he spoke to reporters in Downing Street, suggesting that he feared the worst.
"I congratulated him on his campaign and what he had done to secure the Olympics for London, what he had done for transport in London and what he has done to improve policing in London, and what he was doing for affordable housing in London - all these issues that Ken Livingstone has raised as Mayor," Mr Brown said.
Opinion polls have suggested the tightest result since the position of mayor was created in 2000.
While a series of YouGov surveys for London's Evening Standard newspaper have given Mr Johnson a comfortable advantage - most recently by a seven-point margin in first-preference votes - other pollsters have put the candidates neck and neck or given a small lead to Mr Livingstone.
Reports from the count suggested neither man would win 50% of the first choice votes cast, and the result will depend on second-preference votes redistributed from the other candidates.
London voters have also been choosing the 25-member London Assembly, with 14 members directly elected from constituencies each made up of two London boroughs and the remaining 11 divided between the parties in proportion to London-wide votes.
The Conservatives are hoping to maintain their position as the largest single grouping, but it is thought unlikely any party will obtain an overall majority.
Electronic counting in London started at 8.30am today. The results were predicted to arrive early evening but were later put back because of record turnout.
Officials said the number of voters was up a fifth on the last set of elections in 2004 and it was the first time more than two million people voted.
With nearly half of the votes counted for Assembly Members the far-right British National Party was placed fourth or fifth in nine constituencies.
And the BNP was running in third place in Havering & Redbridge and City & East, which includes Newham, Barking & Dagenham, Tower Hamlets and City of London.
The Green Party was also performing well, running in third or fourth place in 10 of the 14 constituencies.
Mr Paddick launched a fierce attack on what he described as a "biased and unfair" media.
He said if Mr Livingstone did lose it would be because of his "arrogance" and failure to listen to Londoners.
If Boris Johnson won, it would be "more of a protest vote than a positive vote for Boris Johnson".
Minister for London Tessa Jowell said: "If Ken hasn't won, London has lost somebody very special who is passionate about this city and has done fantastic things for this city."Reuse content