Scottish Voters Hand Labour Rare Defeat

Ballot papers are fed into an automatic counting machine at Aberdeen Exhibition Center Thursday, May 3, 2007. British voters cast ballots Thursday to elect local councils across England and national legislatures in Scotland and Wales - elections that will be interpreted as a verdict on Prime Minister Tony Blair's decade in power. More than 10,000 local council seats are being contested in areas of England outside London. In Scotland, voters are choosing their local representation as well as the Scottish Parliament, which sits in Edinburgh and deals with Scotland-only issues. And in Wales, voters will elect their national assembly, located in Cardiff. (AP Photo/PA, Andrew Milligan) (Andrew Milligan - AP)

Labour last lost a Scottish election in 1955, and has been the largest party in Scotland's parliament since it was established in 1999 following Labour's general election victory two years earlier.

Pro-union parties Labour, the Conservatives and the Liberal Democrats say they won't cooperate with the SNP because of its push for Scottish independence, and would be in a strong majority position to block Salmond's dream of an independence vote.

Nationalists say independence would allow Scotland to take a larger share of lucrative oil and natural gas reserves in the North Sea _ currently split with England.

The Scottish National Party also promises drastic corporate tax cuts that would attract foreign investment and, it claims, transform Scotland into a Tartan Tiger on a par with Ireland's Celtic Tiger economy.

Blair, who is expected to announce next week he will resign as prime minister, has claimed three national poll victories since 1997. Some activists concede the unpopular Iraq war and a domestic cash-for-honors scandal have made him a liability.

He said Labour's result was better than expected.

"You always take a hit in the midterm, but these results provide a perfectly good springboard to go on and win the next national election," Blair said.

"Everyone said we were going to get hammered, it was going to be a rout, and it's not turned out like that," he said. "The fact is we have come from 10 points behind in Scotland to neck and neck."

With results from 308 of 312 English councils counted, Labour retained control of 34 councils, down eight, while the Conservatives took control of 162 councils, a gain of eight from the previous election. The third-place Liberal Democrats held 23 councils, down four.

"A great set of results and I think we can really build on them and really go forward, and I think that's exciting," Conservative leader David Cameron told The Associated Press.

After all 60 Welsh assembly seats were declared, Labour held 26 seats, compared with 15 for second-place Plaid Cymru, the Welsh nationalist party.

There were problems in counting votes. Fog in the remote Western Isles forced a helicopter carrying ballot boxes to be grounded, while a boat ferrying votes from the Scottish isle of Arran broke down.

More than 100,000 ballot papers were rejected. The Electoral Commission, which oversees the conduct and fairness of British elections, announced an independent inquiry into the problems.

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Associated Press writers Danica Kirka in London, Ben McConville in Edinburgh, Scotland, and Rob Harris in Manchester, England, contributed to this report.