EDINBURGH (Reuters) - Scottish nationalists committed to independence from Britain became the biggest party in the Scottish parliament on Friday in elections which left a political headache for Prime Minister Tony Blair's successor.
The Scottish National Party (SNP) ended 50 years of Labour dominance in Scotland in Thursday's vote and Labour suffered heavy losses in local council elections in England and lesser losses in elections to the devolved Welsh assembly.
With Blair expected to announce next week he is stepping down as prime minister after a decade in power, he leaves a poisoned chalice to Chancellor of the Exchequer Gordon Brown, the 56-year-old Scot who is almost certain to succeed him.
Brown must wrestle with the problem of how to revive support for the Labour Party, whose popularity has slumped because of opposition to the Iraq war, a series of political scandals and a general sense of voter fatigue with the party.
Added to that he could now face the tricky problem of managing relations with a Scottish executive dominated by the SNP which has pledged to hold a referendum in three years on independence from Britain.
"This is a historic moment," SNP leader Alex Salmond said. "The Labour Party has no moral authority left to govern Scotland".
Brown received one piece of good news on Friday when one of his last potential rivals to succeed Blair as Labour Party leader and prime minister announced he would not stand.
"I am not going to run in the leadership election," former interior minister Charles Clarke told the Times newspaper. He said he had considered a challenge but believed there was no appetite in the party for a divisive contest.
His decision leaves Brown only likely to face a challenge for the leadership from one of two left-wing Labour lawmakers.
In English local council elections, the opposition Conservatives, resurgent under new leader David Cameron, won around 875 council seats, inflicting heavy losses on Labour.
Blair said the results were far from a rout and gave Labour a "perfectly good springboard" for the next general election, expected in 2009.
The Conservatives took 40 percent of the national vote, reinforcing their credibility as a party that could challenge for power at the next general election.
Labour, a staunch supporter of Scotland's 300-year-old union with England, has attacked the SNP's referendum plan.
Brown said the vast majority of Scots had voted for a Scotland "that maintains its rightful place in Britain".
Polls show a majority of Scots against independence and some voters backed the SNP as a protest against Labour.
Final results showed the SNP with 47 seats to Labour's 46 in the 129-member Scottish parliament, which has power over issues such as health and education.
The SNP's astounding gain of 20 seats compared with the 2003 election left it short of an absolute majority.
Tense coalition negotiations will now take place and while the SNP are in pole position to form the new Scottish executive, there is no guarantee they will be able to do so. Labour may try to form a coalition with parties that back union with England.
The Scottish vote was marred by hitches. Voters complained that tens of thousands of votes had been rejected because people were confused by complex ballot papers. Counting in some major constituencies was delayed by computer scanning glitches.
Additional reporting by Peter Griffiths, Sophie Walker and Peter Graff in London