The Queen and Tony Blair have sent congratulations to the Ashes-winning England cricket team.
Soldiers in Afghanistan cheered England on to victory
The team won the contest for the first time since 1987 in what the Queen called a "truly memorable series".
The prime minister said the team had "lit up the whole summer" with their performance over the five Tests.
Fans also celebrated outside The Oval cricket ground and in pubs around the country, while British troops around the world were glued to TV screens.
Soldiers based at Camp Souter in Afghanistan clapped and cheered as England came closer to victory.
At the Oval, fans danced around the ground and out onto the streets singing: "The Ashes are coming home."
From a nearby block of flats, a banner aimed at Australia and their fans simply read: "Barbecue that!"
The Queen said: "Both sides can take credit for giving us all such a wonderfully exciting and entertaining summer of cricket at its best."
England fan Grant Steel, of Newcastle, told BBC News the series win had "put English cricket back on the map".
"It has suddenly become a big event - everyone enjoys it and appreciates it," he added.
"Even my parents and my girlfriend listened to the game," the 31-year-old construction worker added.
"It has been a fantastic series, and I will be celebrating tonight."
The Queen watched the final test match of the series while on her annual holiday at Balmoral.
In her message sent to England captain Michael Vaughan, she said: "My warmest congratulations to you, the England cricket team and all in the squad for the magnificent achievement of regaining the Ashes."
The triumphant players congratulated each other in the dressing room before Vaughan took them on to the field to a standing ovation.
An emotional Vaughan said: "It is an amazing feeling. It has been a roller-coaster of a summer. The lads have put a whole lot of hard work in."
Prime Minister Tony Blair told the team: "By bringing the Ashes back after so long you have given cricket a huge boost and lit up the whole summer."
Conservative leader Michael Howard said: "Congratulations to England on this tremendous victory.
"Michael Vaughan, his team, and all involved, should be proud of this achievement and the manner in which they have played during this extraordinary summer of excitement and tension.
"Australia are a wonderful team who also deserve praise for making the battle for the Ashes such a compelling spectacle.
England fans are also celebrating the "magnificent achievement"
"After nearly two long decades, well done England!"
Liberal Democrat leader Charles Kennedy said: "England's victory is historic, and I send hearty congratulations to the team.
"It has been impossible not to get caught up by the excitement and sense of good will in the past few days."
Liberal Democrat president Simon Hughes told Vaughan and his team: "For millions of cricket fans and other sports followers today's win is one of the proudest moments of our lives.
"We can't thank you too much for the pride which you have given back to cricket across the country.
"The Ashes are one of the crown jewels of British sport.
"Your friends and supporters will now be doing all they can to develop cricket across the country and to bring cricket back to free-to-air television as soon as possible."
There had been £50m riding on the Ashes' outcome - making it the biggest betting series ever, according to bookmaker William Hill.
Spokesman Graham Sharpe said England's victory would see "British bookies paying out tens of millions of pounds to patriotic punters who backed England at 11/4 prior to the commencement of the series and at 9/1 after they lost the opening test".
One punter from Dorset was £11,250 better off after staking £3,000 on England to win at pre-series odds of 11/4.
Australian fan Marco Dicarlo, 32, from Queensland, told BBC News he had lost £140 on the series.
But he added: "It has been an outstanding series.
"I have never seen an Ashes like it in my lifetime and I don't think I will ever see another one.
"I was at Lord's for the first day of the first test and saw 17 wickets and 340 runs."