Don Touhig believes Labour can still win the next General Election
Labour was "kicked" at council elections by voters sending a message they are disillusioned, says a close ally of Prime Minister Gordon Brown.
Islwyn MP Don Touhig said the party had to learn lessons after losing control of six Welsh councils.
But Mr Touhig, a former parliamentary private secretary to Mr Brown, said the PM could still lead Labour to victory.
All other big parties made gains, and Tories now have majorities on two Welsh councils - the same number as Labour.
Other councils are likely to be run by coalitions of the other parties.
After the 1999 elections, Labour ran nine Welsh councils, but it now has a majority in just two - Neath Port Talbot and Rhondda Cynon Taf.
It has lost control of Caerphilly, Torfaen, Blaenau Gwent, Merthyr Tydfil, Newport and Flintshire.
However, it has regained control of Bridgend, where it fell two short of a majority, but struck an informal deal with two independents.
Mr Touhig, a former Wales Office and defence minister, said: "We've taken a pounding.
"The important thing is that Labour voters stayed at home or they turned against us.
"We have to listen to that message. I mean we are serving the people. That's the only purpose we're there.
"And I think we have got a very important message to take back - as a government, as a party in order to proceed for the future."
He added: "I think we have to take the message back to government that Labour supporters feel disillusioned with some things that have happened."
Mr Touhig said Mr Brown could still give Labour a general election win, despite the poor council results.
"I believe Labour can win a general election under Gordon Brown - it could be two years away," said Mr Touhig, who was parliamentary private secretary to Mr Brown after Labour's landslide victory in 1997.
Mr Brown's plight today has been compared by commentators to John Major's when the Conservatives suffered a heavy defeat at the 1995 council elections, two years before the Tories were thrown out of office.
"The important thing is we've been very kicked," said Mr Touhig. "Our supporters have sent us a message. "
Meanwhile, First Minister Rhodri Morgan blamed Labour's worst UK electoral performance in 40 years on economic problems over which it had no control.