George Galloway's Respect Party followed up its shock by-election victory by winning five seats on Bradford Council, including that of the Labour leader.
Councillor Ian Greenwood lost his Little Horton seat after three re-counts to Respect's Alyas Karmani.
Mr Galloway, who upset Labour by winning the Bradford West parliamentary seat in a March by-election, was absent for the count, which saw his party successful in five out of the 12 wards it contested.
If Mr Greenwood had won his seat it would have seen his party take overall control of the council.
Before the result, no party had overall control in Bradford and Labour ran the authority as a minority administration.
On the night, Labour increased its councillors from 43 to 45 meaning it will need the votes of one other member to give it a majority.
There were jubilant scenes in the Richard Dunn Sports Centre as Respect supporters celebrated each of their victories.
Mr Galloway said he boycotted the count following a dispute with the council over how many passes Respect were allowed.
Speaking after his defeat, Mr Greenwood said he did not think the result meant Respect now held the balance of power in the city.
He said he thought the key to Respect's success was Mr Galloway coming to the city and energising a mass of youngsters.
"He's made promises that I hope that he can keep but I doubt that he can," he said.
Mr Greenwood said he feared Mr Galloway's energisation would not last and Bradford would be left with a "generation of disenfranchised and alienated young people".
Speaking at his campaign HQ, Mr Galloway said: "By anyone's calculation it's been a fantastic night for Respect.
"We took seats off all three of the mainstream parties.
"We took seats in Bradford West, my constituency, but also outside of Bradford West.
"And we took the head off the rotten fish that is the Bradford City Council.
"We defeated a council leader who sat there, apparently impregnable and utterly complacent, for a decade and a half or more."
He said Respect offered voters a "viable alternative to the tweedledee, tweedledum, tweedledee-and-a-half politics that the three mainstream leaderships are offering them".
Mr Galloway said: "I think that the Labour Party in Bradford will be taken into special measures by the Labour national headquarters."