Gordon Brown's Labour party has suffered its worst performance since the 1960s in local elections in England and Wales.
According to BBC research, Labour has slipped into third place nationally, with just 24 per cent of votes.
David Cameron's Conservative party has gained about 44 per cent of the national vote, while the Lib Dems has secured 25 per cent.
Labour has also lost 331 councillors and nine councils - including Blaenau, Hartlepool, Merthyr Tydfil, Reading, Torfaen and Wolverhampton.
The Tories, meanwhile, have gained 256 councillors and 12 councils. Key Conservative gains include Bury, Harlow, Maidstone and North Tyneside.
Mr Brown said it was a "bad and disappointing" election for his troubled party.
He told reporters: “It’s clear to me that this has been a bad night for Labour. We have lessons to learn and then we will move forward.
“My job is to listen and to lead and that is what I will do.”
A delighted Mr Cameron described the results as "a very big moment for the Conservative Party".
He said: "I think these results are not just a vote against Gordon Brown and his government, I think they are a vote of positive confidence in the Conservative Party.
“I think people see a party that has changed for the better, that is united, that’s got a strong team of leaders and increasingly they are looking to us, trusting us, to speak out on the issues they really care about - in terms of improving schools and improving our hospitals and dealing with crime on our streets.
“I don’t want any one to think we would deserve to win an election just on the back of a failing government.
“I want us to really prove to people that we can make the changes that they want to see in terms of schools and hospitals and crime and the other issues that really matter to all of us - and that’s what I’m going to devote myself and my party to doing over the next few months.”
And more good news for the Tories will follow later this evening when Boris Johnson is named as the new mayor of London.
Senior Conservative sources told the Telegraph they would be “gobsmacked” if Mr Johnson did not win the mayoral contest.
Labour officials have also privately conceded that their candidate, Ken Livingstone, has lost.
General turnout looks like it will be about 35 per cent this year.
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