With just 11 per cent of the vote, the Tories lost control of all six councils where they had an overall majority.
Their share of the vote was even lower than last year's 14 per cent. The results mean that the Tories will no longer provide any local services north of the border and the governing party will, in effect, cease to exist at local level.
Labour, on 47 per cent - their highest-ever share of the vote in Scottish local elections - won overall control in more than 20 of the 29 single- tier authorities.
The Scottish National Party, on 27 per cent, was down from 33 per cent in last year's European elections.
The Liberal Democrats, on eight per cent, failed to win a single council. No party won overall control in East Renfrewshire, the Tories' key target, and in Dumfries and Galloway. Highland council was won by Independent councillors.
The results were doubly embarrassing for Government ministers. When the 29 single-tier authorities elected last night were set up to replace the existing regions and districts they were accused of gerrymandering councils which the Conservatives could defend.
Conservative hopes that the SNP surge would slow the "Blair-effect" juggernaut were also dashed, as Labour proved capable of winning seats from all three rival parties.
Last night's results are a signal that the Tories face electoral humiliation at the local elections in England and Wales next month - a message reinforced by today's Gallup poll in the Daily Telegraph giving Labour a 35-point lead on 58 per cent.
Signs of Conservative disaffection emerged as soon as the polls closed.
Conservative councillor Bill Aitken, re-elected after 19 years for the Glasgow Kelvindale ward, said: "We face a lot of bad news tonight. I have little doubt that there will be great bitterness on the part of many Tory candidates up and down the country who feel that they have been sold short by the Government and the antics over the last few weeks.
"The message is clear. The Government must get their act together or they, in time, will face a similar fate to that of many Conservative candidates tonight."
Fellow Glasgow Tory councillor John Young, elected for Cathcart by a majority of only 38 votes over Labour said: "The people, and many, many Conservatives, told us they were not happy."
As Labour celebrated victory in its long-coveted target of Stirling, Michael Forsyth, the employment minister whose marginal constituency covers the town, admitted to BBC television in Scotland: "It is a pretty disastrous night for us all round and a good night for Labour.
"There are no words I can find to describe it otherwise. It is very unfair."
Among the authorities where Labour won overall control were Stirling, East Ayrshire, North Ayrshire, South Ayrshire, Dundee, Aberdeen, East Lothian, Midlothian, West Lothian, Edinburgh, Glasgow, Inverclyde, Clackmannan, North Lanarkshire, Dumbarton and Clydebank, East Dunbartonshire and Renfrewshire.