Liberal Democrat leader Charles Kennedy is celebrating in Cheadle after his party fought off a Tory challenge and held the seat at a by-election.
Mr Hunter (right) won with a majority of 3657
The election was triggered by the death of Lib Dem MP Patsy Calton from cancer shortly after May's general election.
Mark Hunter held the Greater Manchester seat for the Lib Dems with 19,953 votes, a 3,657 majority over Tory candidate Stephen Day, who came second.
Mr Kennedy said: "This is a first class victory for the Liberal Democrats."
CHEADLE VOTE STATISTICS
Mark Hunter (Lib Dem) 19,593 (52.15%, +3.27%)
Stephen Day (Tory) 15,936 (42.42%, +2.01%)
Martin Miller (Labour) 1,739 (4.63%, -4.16%)
Leslie Leggett (Veritas) 218 (0.58%)
John Allman (Alliance for Change - Suffering Little Children) 81 (0.22%)
Labour's Martin Miller came third with 1,739 votes but lost his £500 deposit.
The swing was 0.63% from Conservatives to Liberal Democrats.
Mr Kennedy was met by Lib Dem supporters bearing banners and balloons as he visited Cheadle on Friday morning.
He said: "What was really tremendous about this result was not just that the government lost its deposit, sweet though that was...
"It was the fact that weeks after the general [election]...we actually got a swing to the Liberal Democrats."
The outcome will come as a relief to Mr Kennedy, although he denies fearing that losing the seat might cost him his leadership.
Mr Kennedy was recently re-elected unopposed as party leader.
He denied reports he had warned his frontbenchers he would sack anybody trying to destabilise his leadership.
"I said no such thing," he said.
But he had told colleagues not to be distracted by press reports from Westminster which were "utterly irrelevant to real politics outside".
Mr Kennedy said he had reorganised parts of the party since the election.
"You can't as a leader make an omelette without cracking eggs and then you get some unfavourable remarks," he added.
Mr Hunter said he was proud to be Cheadle's MP and claimed people had voted for a "more honest and positive approach".
He told BBC News he believed there was a "backlash" against the "American-style" canvassing tactics used by parties like the Conservatives.
"The Conservatives have failed again and have disgraced themselves with more negative and personal mud-slinging than ever before," said Mr Hunter.
The new MP has stood down as leader of Stockport Borough Council.
Ms Calton won Cheadle from the Conservatives in 2001 with a majority of 33, the smallest in the country.
Although unable to campaign because of a recurrence of her cancer, Ms Calton increased her majority in this year's May election to 4,000.
Conservative Mr Day was the area's MP until 2001 but says he will not stand again as a parliamentary candidate.
He said: "I am pleased to see that the Conservative share of the vote has gone up.
"This is the best by-election result we have had in a long time and it is the Labour Party which is in trouble."
Labour's Mr Miller said the result "showed that people were willing to vote for anyone to make sure the Conservative Party did not win".
The Conservatives have not gained a seat in a by-election since 1982.
Shadow Commons leader Chris Grayling said he was disappointed but not surprised the Tories had failed to win the seat.
He said the result was similar to the general election and little had happened politically since then to "change the overall lie of the land between the different parties".