Labour holds on but Tories collapse to fourth place behind UKIP

Labour held on in the Hartlepool by-election early today in the face of a Liberal Democrat surge, while the Conservatives crashed into a humiliating fourth place.

Iain Wright saw off a Liberal Democrat challenge by 2,033 votes - a fraction of the Labour majority at the previous general election - but the party high command will still be delighted to hang on to a formerly safe seat. Mr Wright polled 12,752 votes, comfortably ahead of the Liberal Democrat Jody Dunn, on 10,719, despite a swing to her party of more than 20 per cent.

Conservative Jeremy Middleton picked up just 3,044 votes, behind Stephen Allison, of the UK Independence Party (UKIP), on 3,193. It was thought to be the first time since the Second World War that the principal Opposition party had come fourth in an English by-election.

Mr Wright proclaimed the result "great news" for Tony Blair, but an "absolute disaster" for Michael Howard.

With Hartlepool's voters choosing a replacement for the departing Peter Mandelson, Labour made a massive effort to avert a repeat of recent by-election losses to the Liberal Democrats in Brent East and Leicester South. But another slump in the Government's support in a previous stronghold just seven months before the likely date of the next general election will ring alarm bells in Labour headquarters.

It will find it hard to blame the slump on anti-war sentiment; canvassers said the issue was rarely mentioned on the doorsteps and, unlike recent by-elections, has a negligible Muslim community.

The by-election in the constituency, represented for 12 years by Mr Mandelson, coincided with the end of a Labour conference overshadowed by the ordeal of the Baghdad kipnap victim Kenneth Bigley.

The share of the vote for Labour fell from 59 to 41 per cent. By contrast, the Liberal Democrats saw their share leap from 15 to 34 per cent. On the eve of their annual conference, the Conservatives also saw their vote melt to a new low after their candidates had come third in three previous by-elections.

Peter Hain, the Leader of the Commons, told the BBC: "To win a by-election in these circumstances in which everyone has been kicking the Prime Minister, saying we've lost trust, is a great result."

He said the "real lesson" of the by-election was that the Conservatives had an unpopular leader and policies that did not add up. He added: "The Liberals have done quite well, but we have actually done much better than we had thought."

Lord Rennard, the Liberal Democrat campaign director, said: "This result in what was Labour's 103rd safest seat confirms there is now nowhere in Britain we cannot compete."

David Willetts, a Tory shadow cabinet member, said: "I'm not going to pretend this is anything other than a very disappointing result for us.'

Labour fought an aggressive campaign in the by-election, which was triggered by the resignation after 12 years as the town's MP of Mr Mandelson, the former Cabinet minister, to become the European Commissioner for Trade.

It focused on the charismatic Ms Dunn, accusing her of being soft on drugs and crime and of not being a true Hartlepudlian because she lives 25 miles away, near Darlington.

The Liberal Democrats retorted by claiming that the town's hospital faced closure, a charge dismissed as scaremongering by Labour. They accused Mr Wright, an accountant, of fighting a negative campaign.

At the previous general election, Mr Mandelson piled up a 14,571 majority for Labour with almost 60 per cent of the votes cast. Until yesterday the town, built on the coal, steel and shipbuilding industries, had been regarded as a party stronghold, returning Labour MPs to the Commons since 1964. In this year's council elections the party also regained a majority on the town council. But it has shown an independent streak, electing the mascot of Hartlepool's football team, H'angus the Monkey, alias Stuart Drummond, as the town's Mayor.

Lord Rennard, who masterminded recent Lib Dem by-election successes, stressed that the party did not just have to overhaul a 14,571 majority, but the 17,000 votes that separated Labour and the LibDems, who finished third in 2001. Success of that kind, replicated nationwide in a general election, would strip away three quarters of Labour's seats.

Though the Lib Dems had shortened the 8 per cent gap between the two parties revealed in a Channel 4 News poll several weeks ago, canvassing returns suggested the Grange and Stranton municipal wards - key Labour strongholds - remained on a knife edge when polling booths closed. "The 14,000 isn't the problem," said Ms Dunn's press officer, Ed Fordham. "It's the 571."

THE RESULT

Iain Wright (Lab) 12,752

Jody Dunn (Lib Dem) 10,719

Stephen Allison (UKIP) 3,193

Jeremy Middleton (Con) 3,044

2001 result:

Lab: 22,506; Con: 7,935;

Lib Dem: 5,717

(UKIP did not field a candidate)