Prime Minister Tony Blair has signalled his readiness to listen to voter concerns after the Liberal Democrats seized one of Labour's safest seats in a key north London by-election.
Kennedy: The government has got to listen
Sarah Teather won the Brent East poll by more than 1,100 votes, overturning a 13,047 majority and marking Labour's first loss of a Commons seat in a by-election for 15 years.
The by-election, which saw London MEP Robert Evans knocked in to second place with 7,040 votes, compared with Ms Teather's 8,158, sent shock waves through the New Labour leadership.
Conservative chairman Theresa May said the result, which saw her party's candidate Uma Fernandes trailing in third place with 3,368 votes, marked a "devastating blow" for Labour in one of its "heartlands".
LABOUR'S VOTE SHARE FALLS
Labour vote share dropped by 29.5% compared with the general election
The Lib Dem share rose by 28.6%
Tories dropped by 2%
Turnout was low on 36%
Swing was 29% from Labour to Lib Dems
Liberal Democrat leader Charles Kennedy described the outcome as a "great fillip" for his party on the eve of its annual conference in Brighton next week.
But the poll prompted Labour former ministers Frank Field to warn that Labour could be at risk of losing the next General Election and Glenda Jackson to reiterate her call for Mr Blair to quit.
As all sides ruminated over the record 29% swing from Labour to the Lib Dems, Mr Blair's official spokesman said the prime minister "had made it clear that we need to listen and explain".
However, the spokesman insisted the government would not be diverted from its reform agenda - despite major concerns from within the Labour party.
BBC political editor Andrew Marr said Brent had given Mr Blair "a bloody nose" but the prime minister had made it "crystal clear" there would be "no apology or shift on Iraq, and more reform, not less, in the public services".
And the Tories would also refuse to be diverted by the by-election, he said, adding: "There seems no one around with the courage or support to openly challenge Iain Duncan Smith."
But as Liberal Democrats celebrated, Labour chairman Ian McCartney admitted he was "very disappointed" to have lost the formerly rock-solid seat.
He joined Home Secretary David Blunkett in conceding that the war with Iraq may have been a crucial factor in the result.
RESULT IN FULL
Sarah Teather (Lib Dem) 8,158
Robert Evans (Labour) 7,040
Uma Fernandes (Conservative) 3,368
Noel Lynch (Green) 638
Brian Butterworth (Socialist Alliance) 361
Khidori Fawzi Ibrahim (Public Services Not War) 219
Winston McKenzie (Independent) 197
Kelly McBride (Independent) 189
Harold Immanuel (Independent Labour) 188
Brian Hall (UK Independence Party) 140
Iris Cremer (Socialist Labour Party) 111
Neil Walsh (Independent) 101
Alan Howling Lord Hope (Monster Raving Loony Party) 59
Aaron Barschack (No description) 37
Jiten Bardwaj (No description) 35
Rainbow George Weiss (WWW.XAT.ORG) 11
The by-election in London mayor Ken Livingstone's old seat took place on Thursday after Labour MP Paul Daisley died of cancer in June, aged 45.
Mr Kennedy said it was now clear to him his party was on course to over take the Tories as the real opposition to Labour.
"In Britain's most diverse community, we have shown that we can speak for every section of society and the Liberal Democrat message is one they want to hear."
The party will now have 54 MPs in Westminster, with 29-year-old Ms Teather making the transition from being a councillor in Islington to become the youngest member of the Commons.
However, with a turnout of 36.4%, senior Labour figures say many of the party's supporters simply did not vote.