The Conservatives have lost control of two English local authorities as the UK Independence Party made some stunning electoral gains and declared itself the "official opposition".
Nigel Farage's party became the second largest party in Lincolnshire as the Conservatives lost control of the county council.
UKIP also finished second with 24% of the vote behind Labour in the South Shields parliamentary by-election, with the two coalition parties suffering a drubbing.
It was another bad result for the Conservatives who finished third, and a disastrous one for the Liberal Democrats who lost their deposit and finished seventh with just 352 votes behind UKIP, the Tories, an independent, the Socialist Party and the BNP.
"Send in the clowns," said a delighted Mr Farage, who's candidates were earlier this week dismissed as a bunch of clowns, fruitcakes and closet racists by Tory Cabinet Minister Ken Clarke.
Richard Elvin, the UKIP candidate who came second in South Shields "We've been abused by everybody, attacked by the entire establishment who did their best to stop ordinary decent people going out and voting UKIP, and they have done in big, big numbers," he said.
"By the end of today we are going to have a fair tally - and it sends a shockwave, I think, through the establishment."
Asked whether UKIP were no more than the beneficiaries of protest votes against the coalition Government, Mr Farage replied: "If you speak to the Westminster elite, they will tell you 'it is just a protest, nothing to worry about really'.
"When I meet UKIP voters they say, 'Nigel, we're voting for you because we believe in what you stand for'.
"These votes are not easily going to go back to the Labour and Conservative parties."
A UKIP spokesman said the party was "delighted" and on course to win "well over" 100 seats, with counting still to take place in the vast majority of English authorities and the Isle of Anglesey in Wales.
He said the council successes were a "stepping stone" to the party's eventual aim of winning parliamentary elections.
More than 2,300 seats are being contested in polls for 34 English councils "If this is any sign at all, it will make a few MPs feel a bit less comfortable in their parliamentary seats," the spokesman said.
The party had succeeded in securing "bridgeheads" in counties across England, he said. "It's now looking likely that we will get well past 100 county council seats."
Senior politicians from the three main parties attempted to explain the UKIP surge, which could have major implications, particularly for David Cameron as he attempts to calm the fears of grassroots Tories nervous at the loss of votes to Mr Farage's party.
Conservative Chairman Grant Shapps acknowledged that his party had been hit by the rise of UKIP.
He told Sky News: "We hear the message, we get it, we understand what people are saying. They want to see change faster in this country and that is what we intend to deliver over the next couple of years.
"We need to show that we are relentlessly on the side of hard-working people in this country, who want to get on in life, do the right thing, and Conservatives back them.
"We have actually been making progress - we've cut the deficit by a third and cut net immigration by a third.
UKIP leader Nigel Farage on the local election campaign trail yesterday "My main concern is to listen to the voters and make sure we are reflecting their concerns - putting jobs and prosperity and fixing the economy first and foremost - that's where all our time and energy is going to be focused."
Lib Dem deputy leader Simon Hughes insisted his party was holding ground in places where it has strong support - and that it was the Labour Party that was in trouble.
"We have had losses, but not catastrophic losses, and UKIP has picked up some seats," he said.
"At the moment we are in second place in the number of county councillors elected in the six counties and Labour and UKIP are on evens in third place. Now if you were the main opposition party I think you would not be keen to be scrabbling around in third place with UKIP.
"I'm not complacent about UKIP, but we are a party of government, and government parties generally have a harder time in a by-election and in elections in the middle of a parliament."
Overnight counts took place at six authorities which were held by the Tories before the election.
The Conservatives retained control in Dorset, Essex, Hampshire and - narrowly - Somerset, where they lost five seats and the Liberal Democrats lost four.
But as well as in Lincolnshire, they were ousted from overall control in Gloucestershire, where there were four gains for Labour and three for UKIP.
The Tories were sent a warning in their traditional Essex heartland, losing nine county council seats to a bullish UKIP.
Despite losing overall control of Gloucestershire County Council, the Conservatives remained the largest party with 23 seats.
And they were held to "Ransome" in Limcolnshire as a mother-of-four Sue Ransome and her daughters Felicity and Elizabeth celebrated three UKIP gains in Boston.
There was some good news for Nick Clegg as the Lib Dems won the by-election in the Fulwood ward in the heart of his Sheffield Hallam constituency in South Yorkshire, ahead of Labour, the Tories and UKIP.
Labour's Norma Redfearn ousted incumbent Tory Linda Arkley in the battle to be mayor of North Tyneside.
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