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Photograph: HINA/ Damir SENČAR /ds

Britain's Labour Party has avoided the heavy losses feared in regional elections, after most results were declared on Friday, but the centre-left party lost further ground in its former political heartland of Scotland.

"Across England we had predictions we'd lose councils," Labour leader Jeremy Corbyn told supporters in Sheffield, where Labour won a by-election for the national parliament.

"We didn't [lose]," Corbyn said. "We hung on and we grew support in some places ... because our party is standing up against the grotesque levels of inequality in Britain."

The party retained important seats even in the traditionally Conservative south. However, it suffered further losses to the ruling Scottish National Party (SNP) in the Scottish Parliament, sliding to third place amid a Conservative revival north of the border.

The SNP retained its position as the dominant party in Scotland's regional parliament but failed to maintain its outright majority after losing several seats.

Gains made by British Prime Minister David Cameron's Conservative Party pushed Labour into third place in Scotland.

Cameron said the strong showing in Scotland would allow the Conservatives to "stand up to the SNP and give Scotland strong opposition."

Dubbed "Super Thursday," the elections for regional and local assemblies have been seen as Corbyn's first test in national polls.

Leftist Corbyn became Labour leader last year but critics have expressed doubts over his ability to unite the party. He has also faced criticism inside and outside the party over his handling of recent claims of anti-Semitism, following the suspension of two prominent members over controversial remarks.

Despite Labour's share of the vote falling significantly compared to regional and local elections in 2011 and 2012, the party appears to have regained some footing after a disastrous result in the general election last year, which handed Cameron's Conservatives a majority in parliament.

Meanwhile, the right-wing UK Independence Party (UKIP), which is campaigning heavily for Britain to leave the European Union in a June 23 referendum, made gains in local councils in England and won its first seats in the Welsh regional assembly.

Labour Party candidate Sadiq Khan appeared set to become London's first Muslim mayor, after a final YouGov survey for the London Evening Standard gave him 57 per cent of the first and second preferences.

Ahead of the result for the mayoral election, which is expected early Friday evening, two prominent politicians in London slammed Conservative candidate Zac Goldsmith's campaign for its focus on Khan's religious background and its claims that the former human rights lawyer had associated with extremists.

Andrew Boff, a Conservative member of the London Assembly, told the BBC he was "really troubled" that Muslims could feel distanced from the party as a result.

"I'm afraid we have taken a couple of steps back in this campaign," Boff said.

Labour's Diane Abbott, who became one of London's first black members of parliament in 1987, accused the Conservatives on Friday of running "the most appallingly anti-Muslim campaign" in the mayoral election.

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