Picking up the pieces in Eastleigh: What hope for the Tories now?

The Conservative party was being forced to engage in some vigorous soul-searching this morning, as it woke up to one of its most humiliating by-election results in memory.

The party slipped to third place in Eastleigh, one of its top ten target seats for the general election, behind Ukip and the Liberal Democrats.

"This is a by-election, it's mid-term, it's a protest," David Cameron said.

"That's what happens in by-elections. It's disappointing for the Conservative party. But we must remain true to our principles, true to our course, and that way we can win people back."

The result was particularly damaging for the prime minister given he had already tried to win back Ukip voters with a pledge to hold a referendum on Britain's membership of the EU.

Norman Tebbit said the result was a product of the Tories' core vote "kicking back" while Conservative MEP Daniel Hannan called for a limited electoral pact between his party and Ukip.

There were also calls for Cameron to hand more control over election strategy to Lynton Crosby, who the Tories have brought in to help mastermind their 2015 campaign – although Crosby's record of focusing on welfare and immigration was already tested in Eastleigh, to little avail.

Government ministers were sent out to speak to the press today with a clear message that they would not be changing course.

"It is always the case that governments in mid-term face that moment of anxiety, that temptation to change course," Michael Gove said.

"When the Heath government in the 1970s decided to change economic course, that was a disaster. There were times when Margaret Thatcher was challenged by by-election results in the 1980s, but she stuck to her course.

"If people think you are changing policy in order to take account of a by-election or to play party politics, that is when the problems arise and people think: 'Do you know what? We smell inauthenticity here'."

A poll by Lord Ashcroft served to offer some hope to Conservative activists, however.

The survey found 22% of Tory voters from 2010 switched to Ukip, as did 19% of Lib Dem voters, but the result was soft and seemingly easy to reverse.

Only 43% of Ukip voters yesterday said they would repeat it in 2015.

Nigel Farage was wallowing in the party's impressive 11,571 votes, although he faced questions about whether Ukip might have been able to come first if he had decided to stand in the seat instead of candidate Diane James.

"My ambition is to lead Ukip into the European elections next year as a candidate, which I could not have done if I’d have chosen to stand in the House of Commons, and I believe in those elections next year we can cause an earthquake in British politics," Farage said.

Nick Clegg was celebrating his victory with new Eastleigh MP Mike Thornton in the constituency this morning. The chances of a leadership struggle against Clegg before the next election have now markedly reduced.

"For the Liberal Democrats, my view is the message is very simple: we can be a party of government and still win," Clegg said.

"Two and a half years ago when we entered into coalition with the Conservatives our critics said we’d lose our identity, lose our soul and our ability to win. Last night we proved those critics emphatically wrong."

Ed Miliband's Labour had a harsh evening, barely improving its share of the vote by 0.2%.

"Clearly I would have preferred to have got more votes than we did, but this was always going to be a tough fight for Labour – it's a seat that we've never won," he said.

"It convinces me that we need to redouble our efforts to reach out to every part of the country, including areas where Labour hasn't traditionally been strong.

"This was a disastrous night for the Conservatives and David Cameron. What we want to hear from the prime minister is a recognition that people are deeply unhappy with the direction of the country and he's going to listen."

Bookmakers William Hill shortened Ukip's odds of winning one or more seats at the general election from 5/2 to 7/4. The odds of Cameron no longer being Tory leader by 2015 stand at 7/2.