The Conservatives have won the Crewe and Nantwich by-election. Edward Timpson, the party's candidate, recieved 20,539 votes.
The swing to the Conservatives is 17.6 per cent with 49 per cent of the vote going to the Tories.
Tamsin Dunwoody, the Labour candidate recieved only 12,679 votes. The Liberal Democrat candidate recieved 6,049 votes, meaning the Tories won their first by-election win over Labour in 30 years.
In his speech, Mr Timpson said: "I would like to thank you, the people of Crewe and Nantwich."
He then paid his respects to the former Labour MP, who died recently.
Pointing out that for many people it was the first time they had voted Conservative he assured the audience he "was on your side".
"Above all you have sent a message loud and clear that Gordon Brown just does not get it and the government needs to change."
In her speech losing candidate Tamsin Dunwoody said: "I have been shown such generosity and warmth from the people of Crewe and Nantwich.
Her voice cracking as she spoke of her mother's recent death, she continued: "The Labour party stands united. We will continue to fight for what is right."
The result is a devastating blow to Labour, which has now lost a northern heartland seat in what will invariably be interpreted by political commentators as a sign of things to come.
Speaking on the BBC, Liam Fox, shadow defence secretary said: "For Labour, it's a dire result."
Turnout was 58.2 per cent, official figures released earlier confirm. The number of votes cast was put at 41,856.
Local communities secretary Hazel Blears sounded a contrite note earlier in the evening over the controversial leaflet distributed by Labour activists in Crewe which portrayed the Conservative candidate as an upper class toff.
Speaking on tonight's BBC Question Time programme, Ms Blears said: "I've heard a message from this audience tonight which I will take very seriously, about this campaign, how people feel about that.
"We did our best to get a positive message across about Tamsin [Dunwoody - the Labour candidate]. We couldn't get that message through."
The reply is slightly different to Ms Blear's response to politics.co.uk when challenged on the subject early last week. During that exchange, Ms Blears said by-elections were tough campaigns which were qualitatively different from general elections.
"In by-elections people do want to send you a message and I do take that seriously. I'm not dismissing it," she continued.
Speaking on BBC's Newsnight programme, Labour MP Austin Mitchell said: "In Crewe, I found they're discontented, they're fed up, but they don't hate us. The Labour party isn't hated.
"It's the Liberal party that will be squeezed.
"The party needs to shift its emphasis to revive growth and distribute it fairly... That's the signal," he continued.
"We're going to have to work harder to prove we can run the economy not just well, but fairly."
Earlier this month Labour was pushed into third place by the Tories and Liberal Democrats in terms of overall vote share during the local elections in England and Wales.
Since then the row over Gordon Brown's abolition of the 10p tax band has rumbled on, leading to David Cameron elevating the Crewe and Nantwich vote as a referendum on the prime minister's decision.
During prime minister's questions on Wednesday, Mr Cameron accused Mr Brown of lacking the courage to campaign in the constituency.
Mr Brown responded by claiming prime ministers normally avoided by-elections.
The vote in Crewe and Nantwich was triggered by the death of Labour stalwart Gwyneth Dunwoody earlier this year.
The candidates for the Crewe and Nantwich by-election were:
- The Flying Brick - The Official Monster Raving Loony Party
- Tamsin Dunwoody - Labour
- Gemma Garrett - Independent
- Mike Nattrass - UK Independence Party
- David Roberts - English Democrats
- Elizabeth Shenton - Liberal Democrats
- Robert Smith - Green Party
- Paul Thorogood - Cut Tax on Petrol and Diesel
- Edward Timpson - Conservatives
- Mark Walklate - Independent