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The Liberal Democrats narrowly hung on to Liverpool council last night in a mixed night for the party, which saw few council triumphs for Nick Clegg in his first electoral test.

With the Lib Dems behind by one seat, Warren Bradley, the party leader on the council, said last night that his party remained in overall control thanks to a last-minute defection by an independent councillor to his ranks.

Mr Clegg staved off disaster by preventing Labour’s attempts to cause a rout even though this year the council was named among the worst in England by the Audit Commission. Lord Rennard, the party’s chief strategist, put a brave face on the result. “We are delighted to remain in control of Liverpool with an overall majority,” he said.

The Lib Dems also lost overall control of Pendle in Lancashire, ceding eight seats to rival parties: four to Labour and two to both the Conservatives and to other parties. Party strategists said that they were not disappointed with the overall result, in which they took St Albans in Hertfordshire with gains from Labour.

At 2am, the BBC projected the party’s share of the vote at 25 per cent, about 6 points above its current position in the polls. This puts it one point above Labour, although Liberal Democrat strategists emphasised that such early projections were subject to dramatic change. Lord Rennard said: “If the BBC is right that we have overtaken Labour in national vote share, then it is only for the second time ever. In terms of our council seats, we are holding our own against the high base of 2004 and we are again the clear challengers to Labour in many of its former heartlands.”

The Conservatives said that the results were poor for Mr Clegg. A spokesman said: “This means that Nick Clegg is actually doing worse than Ming Campbell, who was ousted for being an electoral liability.”

Mr Bradley acknowledged that the Liberal Democrats had suffered a “tough night” after ten years in power in Liverpool, but he said that he was determined to carry on with his administration.

He said that Nadia Stewart, an independent councillor for Croxteth, who had left the Labour group last year, had decided to come over to the Liberal Democrats after a “chat” earlier in the day. He insisted he could cling on to power and said: “The Liberal Democrats have retained overall control. We are the largest party and in control of the council. We are proud that we will be able to continue doing the job we have been doing.”

The party had drafted in Mr Clegg to talk up its triumphs, but it was Labour who recorded significant gains in the city, although not enough to take control.

At a time when the administration should be basking in the reflected glory of the European Capital of Culture, the Lib Dems have appeared under siege, mired in scandal, beset by defections and financial deficits and condemned as the worst-performing council in England by the Audit Commission.

The ruling group’s problems began when the Mathew Street music festival, the city’s summer showcase, was cancelled last year. The row, which was conducted in secret e-mails, led to heavy infighting among participants and led to the hurried departure of Jason Harborow, the Culture Company chief executive, with a substantial payoff.

The administration is facing a £20 million bill for its contribution to Capital of Culture which, critics claimed, has been inadequately budgeted for. Labour say that the funding shortage will lead to redundancies and the closure of care homes, swimming pools and libraries.

In February, Liverpool City Council was officially declared England’s worst-performing local authority by the Audit Commission, scoring only one star out of a possible four for “spending money they have not got”.

The defections of two Liberal Democrat councillors sapped morale in the party, blurring the battle lines and reducing their majority in the chamber to six.

Throughout the campaign, senior Labour figures openly admitted that they did not know whether they had the firepower to topple their rivals this year or whether they would have to wait for 2010, the date for the next election.

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