Voters gave Tony Blair a bruising farewell and Gordon Brown a worrying inheritance early today as Labour suffered losses in elections in England, Scotland and Wales.

The Prime Minister, who will announce next week his timetable for stepping down after a decade in power, will leave the Chancellor a party in its weakest local government position since the 1970s.

As the early results came in Labour was losing seats to the Conservatives, including the key council of Gravesham in Kent, and the Liberal Democrats.

But the overall results for the governing party were not as bad as some had predicted and its feared wipeout in Scotland was not happening. At the same time Sir Menzies Campbell’s party was suffering some setbacks.

In the early hours the outcome of the elections for the Scottish Parliament was too close to call. The first results north of the border produced big swings against Labour and to the Scottish Nationalists, but it was impossible to tell which party would end up with the largest number of seats. Dundee West was the first Labour constituency to fall to the SNP.

There were calls for an inquiry into the high number of spoilt ballot papers. Officials rejected about 1,000 papers in every constituency, adding up to a possible 100,000 across Scotland - a figure about six times higher than the figure for spoilt votes in previous elections.

The chaos is believed to have had a significant impact on results. Alex Salmond, the SNP leader, described the confusion as “totally unacceptable in a democratic society”. The Electoral Commission said it was "looking at all the issues".

Mr Brown, expected to succeed Mr Blair in early July, will inherit a party demoralised by a series of poor election results and polls suggesting that its standing has reached the nadir of the Michael Foot years.

Another survey last night revealed that Labour was now seen as twice as divided as the Conservatives and Liberal Democrats.

Mr Blair, who may stand down from Parliament before the next general election, triggering a by-election in his Sedgefield seat, played a big part in his last election campaign despite fears that the electorate would use it to give him a “final kicking”.

And, as the results came in, it was clear that voters had decided to punish Labour across Britain, with David Cameron and his party having a good night. Four hours after the polling stations closed the Tories were predicting 600 gains in England, taking them back to their 1990 level.

The Conservatives were making early advances, as they hoped, in the North West but were again failing to make headway in the big cities in the North, such as Manchester, Liverpool and Newcastle.

The Tories gained control in Chester for the first time since 1986 and South Ribble for the first time since 1995. There were also gains in Crewe, Nantwich and Pendle and they became the biggest party in Bury. However, they failed to take control of the council, as they had hoped. They made five gains in Peterborough and took control of North Warwickshire for the first time.

A Labour Party spokesman said: “To claim any sort of breakthrough, the Tories would have to be winning councils like Barrow-in-Furness, Bolton or Bury in the North West, which they have completely failed to do.”

But William Hague, the Shadow Foreign Secretary, said: “These elections show that the Conservative Party is back in business in the North. We have taken control of Chester and South Ribble and made significant advances in Bury, Crewe and Nantwich, Preston, Sunderland, Barrow and many others.

“And we are on course to have control of more councils than Labour in the North West.”

The Liberal Democrats took control of John Prescott’s backyard as they became the largest party in Hull at Labour’s expense. They also took control of Rochdale.

But it was a mixed night for the Liberal Democrats. Although they were picking up seats from Labour they were losing to the Conservatives in some areas. They lost control of St Albans and saw the Tories surprisingly take their top target of Woking in Surrey.

The first result declared spelt good news for Mr Cameron, with the Tories retaining control of Tamworth and taking three seats from Labour in the process.

There was a surprise blow for the Conservative leader as his party lost control of Hastings thanks to defeat in two by-elections. The East Sussex town was among the few English councils outside London not having main polls.

The Labour deputy leadership contender Jon Cruddas said that the party’s expected battering should act as a “wake-up call”.

The far-right British National Party suffered an early blow, losing its only seat on Broxbourne Council.

The Scottish election, where Labour was trying to fight off a determined nationalist surge, produced a high turnout.

Jack McConnell, Scotland’s First Minister, was re-elected as the Labour MSP for Motherwell and Wishaw in the first result to be declared in the Holyrood election. But he saw his majority reduced from 9,259 to less than 6,000 on a 50 per cent turnout.

The SNP had their first gain of the night from Labour in Dundee West when Joe Fitzpatrick overturned a Labour majority of 1,066 to win with a majority of 1,946, on a 6.14 per cent swing.

In Wales opposition parties reported that their vote had held up, but that Labour had experienced difficulty in getting its supporters out. Labour conceded the loss of Llanelli, the prime target of the Welsh Nationalists, at around 2am.

The result from the Western Isles, one of the key Scottish election Labour/SNP battlegrounds, will be delayed until today.

Times Recommends

• Times Christmas appeal: Letter from the Editor
• Conferences — what a waste of money
• Schools supremo learns a painful lesson