How bad is it for Blair?

Analysis
By Nick Assinder
BBC News Online political correspondent

Counting is still going on

Tony Blair will search long and hard to find any real comfort to ease his party's humiliation in the local elections.

As deputy prime minister John Prescott confessed, Labour was given a serious kicking by voters who delivered it the worst election result in living memory.

Only the most pessimistic had believed the party would be pitched into third place behind the Liberal Democrats and the Tories - the first time a governing party has suffered that fate.

They knew that Iraq, amongst other things, was going to hit them hard, but most had hoped it would not be this bad.

It may not have been total meltdown, but it was uncomfortably close to that nightmare, with once rock solid areas like Newcastle and Bassetlaw falling away.

And it has almost certainly left Tony Blair facing the real prospect that his leadership will now be a matter of serious debate amongst Labour MPs as they consider the consequences for their own seats in a general election.

And while the result may not have been enough on its own to suggest the Tories could actually win the next general election, it suggested Labour could still lose it.

Central figure

Michael Howard had been looking for signs the Tories could get back into the cities and for a "building blocks" performance. And he pretty much got that.

The Liberal Democrats needed to build on their previous election advances and show they could take votes from both the other main parties. And they appear to have done that.

The smaller parties, including the UK Independence Party and the Greens also improved their performance as voters expressed their protest at the government and, most probably believe, Mr Blair himself.

And it is the effect this result will have on the prime minister's standing that could still prove the most significant outcome.

Because, as far as many are concerned, it was Tony Blair who was at the centre of this mid-term disaster.

Howard's hope

If he was looking for any crumbs of comfort he will be disappointed. It appeared discontent with him - or at least his decision to go to war with Iraq - was a major factor in the Labour vote.

Ministers immediately attempted to suggest this was all simply a bit of traditional mid-term blues with voters delivering a strong protest vote.

They will insist that the Tories failed to make the sort of breakthrough they needed - particularly in urban areas - to suggest it could win a general election outright.

Whether he can then get away with simply brushing aside these results as mid-term blues or whether they will spark a leadership crisis in Westminster will be the big question.

And, while Mr Howard will undoubtedly be celebrating his performance, critics will suggest he still has to prove he can do what William Hague and Iain Duncan Smith failed to do by scoring that long-awaited breakthrough.

And of course the news might be better for the prime minister from the London Mayoral results later on Friday where Labour's Ken Livingstone could win. And if opinion polls are true Sunday night's European Parliament results could see UKIP transferring the spotlight to Mr Howard's leadership.

But, in the face of a government defeat of these proportions in the local elections, such grabbing at straws must ring pretty hollow.

All eyes will now turn onto the Labour Party to see whether panic sets in and if these results mark the start of something more significant for the prime minister.

If backbenchers do panic, then things could yet get very much worse for Tony Blair - who was out of the country as the results came in.

There had already been reports that he was ready to stand down if he proved a electoral liability.

Whether he can then get away with simply brushing aside these results as mid-term blues or whether they will spark a leadership crisis in Westminster will be the big question.