British Prime Minister Tony Blair this morning won a historic third successive term in Government for Labour but saw his party's majority slashed by nearly 100.
Addressing cheering party workers at the National Portrait Gallery in London this morning, Mr Blair acknowledged that the Government had to register and act on voters' concerns.
Mr Blair - who celebrates his 52nd birthday today - told party workers the party had a "mandate to govern this country again. We have got to listen to the people and respond wisely and sensibly but they have made it very clear they wanted to carry on with Labour and not go back to the Tory years."
He went to Buckingham Palace for an audience with the queen this morning and is expected to put the final touches to a Cabinet reshuffle later today
With 619 results in out of 646, Labour appeared on course for a Commons majority over all other parties of 66 - down from 161.
Labour suffered a net loss of 45 seats, the Tories got a net gain of 37, and the Liberal Democrats increased their showing by a nine seats.
Labour were on 36.3 per cent of the vote on a turnout so far of 61.24 per cent - the proportion of the electorate going to the polls having risen 2.14 per cent from 2001. It was believed to be the smallest share of the vote achieved by a winning party in a general election.
The Tories were on 33.15 per cent of the vote, and the Liberal Democrats on 22.55 per cent.
Mr Blair became the first Labour leader to win three contests in a row and promised to learn the lessons of the signals voters had sent by curbing his command of the Commons.
UK Prime Minister Tony Blair
Before flying back to London, Mr Blair told party workers in his Sedgefield constituency: "I know Iraq has been a divisive issue in this country. But I hope now we can unite again and look to the future."
Tory leader Mr Michael Howard conceded defeat at his count in Folkestone, after retaining his own seat.
He said: "It looks that Mr Blair is going to win a third term for Labour and I congratulate him on that victory. I believe that the time has now come for him to deliver on the things that really matter to the people of our country."
He added: "We have sent a message to Mr Blair and in the next Parliament we will be able to form a stronger opposition."
Liberal Democrat leader Charles Kennedy said: "I think it is going to be a very different House of Commons from the one we have had over the past eight years, and I think that is going to be very healthy, whatever people's political views."
The Tories celebrated their first gain just after midnight when they took back Putney, south-west London, from Labour with a majority of 1,766 on a 6.46 per cent swing.
They went on to regain Enfield Southgate, famously seized by Labour's Mr Stephen Twigg from Mr Michael Portillo as Labour romped to a 1997 landslide.
Labour suffered another blow when Mr George Galloway defeated Mr Oona King in Bethnal Green and Bow on his anti-war Respect ticket.
There will inevitably be speculation as to whether the size of Labour's majority will hinder Mr Blair's plans for a smooth transition of power when he steps down.
Mr Blair has said he will serve a full third term, but the prime minister may be vulnerable before then - especially if he suffers a series of major backbench rebellions.
Labour rebel Mr Bob Marshall-Andrews, who hung on to his Medway seat despite predicting at one point during the night that he would be defeated, called on Mr Blair to step down.
He said: "There will undoubtedly be people who believe what I believe, that the Prime Minister should go."
But Mr Blair's former communications chief and still close ally Alastair Campbell insisted that Labour had scored a good result.
Mr Campbell told BBC Radio 4's Today programme "I think it is a fantastic achievement for the party, and for Tony, one landslide in 1997, another in 2001, and now a good majority. I think the Labour Party will be very pleased with it.
Labour election co-ordinator Mr Alan Milburn, who earlier announced that he does not want to stay in the cabinet, also argued Mr Blair had won the right to pursue the New Labour agenda set out in the party's election manifesto.
Mr Milburn argued that the Tories had performed poorly in the election, saying: "It looks as though the Conservative Party remain in the doldrums, stuck on 33 per cent of the national vote, which is exactly where they were in 2001."
Mr Milburn was asked whether it was now inevitable that Chancellor Gordon Brown will replace Mr Blair sooner rather than later.
"Gordon would make an absolutely first rate prime minister. But Tony has equally said that he is going to serve a full term. And so he should, because his achievement is an historic achievement," he said.
Mr Blair now faces several issues in shaping his new cabinet.
Treasury Chief Secretary Paul Boateng has left parliament to become Britain's High Commissioner to South Africa, and ex-Home Secretary David Blunkett is widely expected to make a comeback.
The voters complicated Mr Blair's task by unseating three ministers, including schools minister Twigg and junior health minister Melanie Johnson.