Ed Miliband: I'll win back UKIP voters before election
Ed Miliband has pledged to win back voters from UKIP in time for next year's general election.
With 157 councils declared, his party had gained 292 seats overall, taking control of nine authorities.
But it lost control of Great Yarmouth, Thurrock and North East Lincolnshire councils under pressure from UKIP.
Based on the results, the BBC's projected national share of the vote put Labour at 31% of a nationwide poll, with the Conservatives on 29%.
Mr Miliband there was "a was deep sense of discontent" among voters.
He added: "You also saw some people turning to UKIP and I am determined that over the next year we persuade them that we can change their lives for the better."
The story of Labour's election includes:
- A strong performance in London capped by Labour taking control of Hammersmith and Fulham Council for the first time since 2006. It also won Croydon, Redbridge, Harrow and Merton in the capital
- It took Cambridge City Council for the first time in 18 years
- A UKIP surge in Thurrock saw it lose control of the Essex council, although it remains the largest party
- Labour took Crawley Borough Council in West Sussex from the Conservatives for the first time since 2006
- In the Midlands, Labour held Birmingham but fell short of taking Walsall and Tamworth
- Labour lost seven seats on Rotherham Council to UKIP
- The party lost overall control in Great Yarmouth
Prof John Curtice, of the University of Strathclyde, said the BBC projection of 31% was a "warning" to Labour that "its lead over the Conservative Party looks to be too small to be confident of victory in 12 months' time".
Bassetlaw MP John Mann accused the Labour leadership of the "disastrous strategy" of ignoring UKIP and not taking on the party directly.
Shadow chancellor Ed Balls said the results were "not good enough yet for Labour" and the party has got "more to do" to get the message out.
He told BBC Radio 4's The World At One: "What we've all got to do, Ed Miliband and me and people like John Mann, is get the shoulder to the wheel and get out there and win on the basis of the policies we've got."
Shadow foreign secretary Douglas Alexander, Labour's election strategist, said the results reflected an "anger and alienation" among the electorate, saying "politics as usual is not an adequate response".
He told BBC Radio 4's Today programme: "Labour can win the general election if we take the right steps between now and a year's time."
Labour pointed to its increased vote share in Swindon and other marginal areas, and it gained Croydon from the Conservatives.
But backbench MP and longstanding critic of his party's leader Graham Stringer said Labour's election campaign had been "unforgivably unprofessional".
The Blackley and Broughton MP pointed to an appearance by Mr Miliband on breakfast television when he was asked about how much he spends on groceries.
"The centrepiece of our campaign has been the cost of living and Ed didn't know his own cost of living, he didn't know how much he was spending on shopping."
Shadow business secretary Chuka Umunna rejected the criticisms, but with UKIP performing well he said it was now clear the UK was in an "era of four-party politics".
Labour is hoping to top the poll in the UK in the European elections, which also took place on Thursday, although the final opinion poll in the campaign put UKIP ahead by 1%.
Results from the European election are not expected until late on Sunday when other nations have been to the polls.