British voters showed their anger against the government's failure to revive the economy in local elections that saw Prime Minister David Cameron's Conservatives outflanked on the left by Labour and on the right by the anti-European fringe party, the UK Independence Party.

Cameron hopes a likely win for his party's flamboyant London mayoral candidate, incumbent Boris Johnson, will deliver some positive headlines later on Friday. But the bigger story was the damage to his party's electoral prospects at national level.

"People are hurting; people are suffering from the recession; people are suffering from a government that has raised taxes for them and cut taxes for millionaires. I think that's what we saw last night," said Ed Miliband, leader of the opposition Labour Party.

Britain tipped into a double-dip recession last week, unwelcome news for a government that has staked its reputation on economic competence. Two years into a painful austerity drive, a recent cut in the income tax rate for high earners went down like a lead balloon with the hard-pressed millions.

Derided as "arrogant posh boys who don't know the price of milk" by a rebel from within their own ranks, Cameron and Finance Minister George Osborne have struggled with a perception that they are out of touch with ordinary voters. This was reinforced by a row on the so-called "pasty tax", a VAT hike that raised the price of pasties, a cheap and popular snack.

With results declared in 100 of the 181 councils being contested across the country, Labour had gained 475 new councilors while the Conservatives had lost 279 and their Liberal Democrat coalition partners had lost 133.

UKIP was contesting only a fraction of the total seats up for grabs but where it did field candidates, it averaged a record 14 percent of the vote.

This translated into just seven councilors because UKIP's support is geographically scattered, which makes it hard for the party to win any individual ward.

However, UKIP's surge in support was a clear threat to the Conservatives, who need to increase their popular support before the next national election in 2015.

"There's absolutely no doubt that UKIP is taking away votes from the Conservatives," Philip Davies, a Conservative member of parliament, told Reuters.

"UKIP is a massive threat. It will undoubtedly stop us from winning seats that we would otherwise win (in 2015), and given how difficult it is for us to win an overall majority, every seat counts," he added.

Conversely, UKIP reported that its good result would help it increase its presence in future elections.

"There's been a whole slew of people saying that's it, next time I'll stand because we don't have a UKIP candidate here," a UKIP spokesman told Reuters.

During the last national parliamentary election in 2010, the Conservatives fell short of an overall majority even though Labour was unpopular after 13 years in power. Cameron was forced to form an uneasy coalition with the Liberal Democrats.

Vociferous right-wingers within the Conservative Party have always maintained that Cameron should have done more to appeal to the party's traditional supporters by attacking the European Union and talking tough on crime and immigration.

UKIP's success at Thursday's local elections is sure to embolden those Conservative right-wingers. Calls to hold a referendum on whether Britain should leave the EU will become more strident.