The Conservatives have lost control of Trafford Council – the party’s only council in Greater Manchester and its flagship northern council.
The party lost five seats leaving the local authority with no party in overall control. Labour is the largest party with 30 seats.
The Conservatives have 29 seats and the Liberal Democrats and the Green Party have two seats each.
Labour gained four, the Green Party gained two, and the Lib Dems lost one.
Andrew Western, Labour leader in Trafford, said the result was “far beyond our expectations”.
“We hoped to take the council into no overall control tonight, but to have become the largest party at the same time is a fantastic bonus for us,” he said.
The Conservative party’s Sean Anstee, who led Trafford Council going into the election, said his party had not done enough “to get all of our messages to land”.
“We need to consider and reflect what that means for the people and businesses of Trafford,” he said.
“I will need to think about what we do next and how we come back.”
The council had been Tory-controlled since 2004. Sir Graham Brady, Conservative MP for Altrincham and Sale West, said the result was “deeply disappointing”.
By BBC Radio Manchester political reporter Matthew Bone
The results are in and there’s a deal to be done.
There are 63 councillors in Trafford including two Greens and a pair of Lib Dems.
This little gang of four holds all the cards though. Because they could put either of the major parties into power they just need to name their price.
Labour are the biggest party so they’re expected to be in pole position, but the Conservatives haven’t given up hope yet.
While the votes have been counted, the struggle for power in Trafford is far from over.
Stockport Council remains no overall control with Labour still the largest party.
The party gained two wards and now has 23 seats, compared with 21 for the Lib Dems and 13 for the Tories. The Lib Dems and Tories both lost a seat each.
In Cheadle Hulme North, Labour candidate David Meller beat the Lib Dems’ Claire Halliwell by just two votes.
Stockport Labour leader Alex Ganotis said it was a “fantastic” night.
In Salford, Labour gained two seats and the Conservatives gained one, and Labour held Bury but did lose one seat to the Tories.
Rochdale and Tameside remain Labour strongholds with no seat changes.
Oldham Council also remained Labour-controlled with the party gaining an additional two seats.
The Tories doubled their number of seats from two to four and the Lib Dems lost one of their seats and now have eight on the council.
UKIP were wiped out in Oldham, losing both their seats.
The main exceptions to Labour’s positive night were in Wigan and Bolton.
Five seats were lost by Labour in Wigan with two taken by the Conservatives and three by independent candidates.
In Bolton, although the party held the council, they lost four seats. The Conservatives won three and the Lib Dems took one while UKIP lost two.
The recently-formed Farnworth and Kearsley First Party, which won its first seat at a by-election in March, won two seats.
Manchester City Council, which has all its seats up for election, is expected to declare a result at 18:00 BST.