Britain's Labour Party suffered its worst local election defeat on record and lost control of London, forcing Prime Minister Gordon Brown to rethink his strategy to avoid losing the next national poll.
Conservative candidate Boris Johnson seized City Hall from Labour's two-term incumbent Ken Livingstone with Liberal Democrat Brian Paddick in third place.
Mr Johnson polled 1,168,738 votes to Mr Livingstone's 1,028,966. Earlier today he was received with a standing ovation as he arrived to sign the declaration of acceptance.
Around 400 supporters turned out to witness the formal signing ceremony at City Hall and see Mr Johnson deliver his first speech as mayor.
The result heaped further pressure on Prime Minister Gordon Brown after his party plunged to its worst council election results in four decades.
The election results are a major blow to Brown, who has since been beset by economic turmoil, industrial unrest, administrative blunders and an image problem since he took over from his predeccesor Tony Blair.
Labour officials said the government had failed to address voters' fears of rising food and energy prices, higher mortgages and a possible housing market slump.
"The overall picture is very bad indeed. We should look things straight in the eye and take serious account of the message that the government has been sent by people," cabinet minister Tessa Jowell told the BBC.
In a sign of the government's concern that it has lost touch with voters, she said the government had to "focus much more directly on the practical circumstances of people's lives."
The question now is whether Labour can recover before the next general election, due by mid-2010 at the latest, or whether the tide has turned towards the Conservatives.
Accepting the post, Johnson said he hoped his victory represented a turning point for the party which has been in opposition since Blair swept to power in 1997.
"I do not for one minute believe that this election shows that London has been transformed overnight into a Conservative city but I do hope it does show that the Conservatives have changed into a party that can again be trusted," he said.
According to BBC predictions the Conservatives won 44 per cent of the national vote in the local elections versus 25 percent for the Liberal Democrats and just 24 per cent for Labour - its worst share since comparable records began in 1973.
"People are sending a clear and strong message. There's a lot of dissatisfaction. If we deal with it we can turn things around, if we don't we'll go down," Labour's Geraldine Smith told Reuters.
With all the results counted from local councils in England and Wales, Labour had lost 331 councillors and the Conservatives had gained 252. Analysts said anything more than 200 losses for Labour would be a very bad result.
"It's clear to me that this has been a disappointing night, indeed a bad night for Labour," Brown told reporters. "My job is to listen and to lead and that is what I will do."
Despite the upset, most Labour commentators said the party would be foolish to start casting around for a new leader and Brown was preparing a fight back with plans to unveil a new legislative programme, possibly as early as next week.
The Treasury will also be under pressure to come up with new measures to restore Labour's credibility on the economy - hard won over the past 10 years when Brown was finance minister but squandered in recent months after a mistake over tax rates.
The Conservatives, the once dominant party of Margaret Thatcher, were in buoyant mood after more than a decade in the political wilderness.
They scored victories in the north of England where they have struggled and in Labour heartlands in Wales. Labour lost Reading council, its last remaining stronghold in the wealthy southeast.
"I think this is a very big moment for the Conservative Party, but I don't want anyone to think that we would deserve to win an election just on the back of a failing government," said Conservative leader David Cameron.