By Nicholas Smith

Senior Labour figures started to accept defeat tonight as key seats started falling to the Conservatives.

Despite some successes a mood of resignation crept into the party that has held power for the last 13 years.

Early in the evening, David Blunkett became the first prominent Labour figure to suggest that the current government would not win enough seats to be re-elected.

The ex-minister said: “It’s quite likely that the Conservatives will make it to a majority. My instinct is that regrettably we have lost the election.

“We need to minimise the damage that the Conservatives will to do our economy.”

 This came after the Tories claimed some big victories including in the constituency of Kingswood where they increased their vote by a mammoth 9 per cent.

Labour started the night with expected holds in Sunderland’s three constituencies. Despite the Labour victory the result from Houghton and Sunderland South showed a notional 8.44 per cent swing from Labour to the Conservatives.

Labour Deputy Leader, Harriet Harman, sidestepped questions about the move towards the Tories: "The really significant thing about that result is what you have seen. It is the first of a fantastic new team of Labour women MPs.”

Victory in Tooting for Labour’s Sadiq Khan, the first Muslim Cabinet minister, was outweighed by Tory gains in Putney and Battersea.

As expected, Prime Minister Gordon Brown kept his seat in Kirkcaldy and Cowdenbeath, increasing his majority by more than 5,000 votes.

In a weakly worded acceptance speech, the Prime Minister said he still might have some part to play in the governing of this country.

Mr Brown said: "The outcome of this country's vote is not yet known, but my duty to the country, coming out of this election, is to play my part in Britain having a strong, stable and principled government.”

In the case of a hung parliament the incumbent Prime Minister gets the first shot at forming a government.

Peter Mandelson, architect of New Labour and current Business Secretary, said: "The constitutional conventions are very clear. The rules are that if it's a hung parliament, it's not the party with the largest number of seats that has first go - it's the sitting government."

Earlier in the evening, he said: "Of course, many people have turned away from the Labour Party but what they haven't done is to fly into the arms of David Cameron's Tories."

 Pressed on whether Labour would seek to do a deal with the Lib Dems to try to hold on to power, he said: "I have no problem in principle in trying to supply this country with a strong and stable government."