Labour have clung on to control of City of York Council after David Evans claimed victory in the Bishophill by-election.
The result means the party becomes the largest group in the authority, with 25 seats.
But it remains a hung council, meaning a united Liberal Democrat and Conservative or Independent force can defeat Labour in votes.
The result left both Labour and the Liberal Democrats confident for the impending general election, expected to be announced at any time, with Liberal Democrats taking heart at gains in what is traditionally a very strong Labour seat.
But Councillor Evans said: "I have made it very clear that I was campaigning on what the Labour Party has done in York and I think people have given us their resounding support in this vote.
"The people of York have made it clear what they want. That is an excellent message for Labour and, with the general election coming up, I am sure (York MP) Hugh Bayley is very pleased, as am I."
Last year, Labour lost two by-elections to the Liberal Democrats, including one in the historically Labour-voting Bootham ward.
Coun Evans said: "The party was going through a rough patch at that time, with local issues and with national opinion polls going against us.
"Tonight, the people of Bishophill have told us exactly what they want."
Coun Evans won the seat with 686 votes, while Liberal Democrat candidate Martin Bartlett took 556, Andy Chase of the Green Party took 370 and Conservative Bill Bennett won 246.
But the Liberal Democrats said their increase in the Bishophill vote, from 325 in 1999, was very encouraging.
Mr Bartlett said: "I had not fully appreciated the sheer depth of Labour support here, particularly among the middle classes, but I think we definitely had them worried.
"Our vote has almost doubled, and I see that as part of the process of building a strong Liberal Democrat party in this area."
Liberal Democrat leader Steve Galloway said: "Our reckoning is that Labour's support in this ward has fallen from 47 per cent to 37 per cent.
"If we get a swing like that in all other wards, the Labour Party would only have three seats.
"It certainly gives out a message for the general election, that the Liberal Democrats are the only alternative to Labour in York."
Green Party candidate Mr Chase also made advances, increasing his vote slightly from 1999's 358.
He said: "I am very proud that we have increased our vote. This certainly gives a clear message about the issues I campaigned about, particularly the Coppergate issue."
But the Conservative vote dropped by nearly 100.
Mr Bennett said: "This is the worst ward in the city for the Conservatives and I couldn't expect a lot."
And leader of the York Conservatives John Galvin said: "It's disappointing, but I think the only message we can get out of this result is that a lot of people haven't yet made their minds up for the general election, and they won't until they go to vote in it."
The Bishophill by-election was called following the death of Carol Wallace in December.
It saw a turnout of 1863, which is 36.21 per cent of the electorate.
Updated: 09:50 Friday, February 23, 2001
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