Tsang has offered to go
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Pro-democracy campaigners in Hong Kong have been celebrating significant gains in Sunday's local elections.
The Democratic Party said it had won 93 of the 120 wards it contested.
The chairman of the pro-Beijing Democratic Alliance for the Betterment of Hong Kong (DAB) offered to resign in the face of what he called "the worst defeat we have suffered".
Turnout reached a record high in the first major test of public mood since anti-government protests last July.
Those protests were against proposed new security laws which were then shelved.
A record one million Hong Kong people voted - 44% of the electorate.
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ELECTION RESULTS
Democratic Party: 93 seats (up from 86)
DAB: 64 seats (down from 83)
Turnout: 44%
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Clear message
Democratic Party chairman Yeung Sum said voters had sent "a very clear message" that they wanted "full democracy".
Hong Kong's district councils have few powers.
But the BBC's Chris Hogg says the pro-democracy movement had called for people to use the election as a means of expressing their discontent with the government of Tung Chee-hwa.
Mr Tung, Hong Kong's chief executive, was hand-picked by China to run the former British colony after its return to Chinese sovereignty in 1997.
In the summer he was forced to back down on proposed new security legislation after hundreds of thousands of people took to the streets.
Calls for full democracy, including the direct election of the chief executive, have been growing since then.
Sunday's local elections were the first opportunity for the demonstrators to express their discontent via the ballot box.
The July protests shocked leaders in Hong Kong and China
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Our correspondent says people want more democratic reforms and are punishing the government for not moving fast enough on constitutional change.
The pro-Beijing parties, who have tried to distance themselves from the government's most unpopular policies, managed only to have 64 of their 206 candidates returned.
Several senior DAB party members who had been largely supportive of Mr Tung's government lost their seats.
Party chairman Tsang Yok-shing said it was the worst showing for the DAB since it was formed 11 years ago.
The party leadership will meet to consider his offer to stand down and to consider the results of the elections - but with many party leaders having been unseated, analysts say it may be difficult for the party to find its feet again.