The UK Independence Party surged past the Liberal Democrats in Corby to secure their best ever by-election result of more than 14 per cent of the vote.
As the Lib Dems lost their deposit – with their vote collapsing from 7,834 two years ago to 1,770 – the Ukip leader Nigel Farage proclaimed a “great result” for his party in third place.
“Along with the other results coming in from around the country today, including the 31 per cent we scored in a council by-election in Manchester, it confirms that we are now established as the third force in British politics,” he said.
The strong showing of Ukip in Corby will reawaken Tory fears that the party could make decisive inroads into the Conservative vote at the next general election and in the 2014 European elections.
David Cameron is being urged by some MPs to offer an EU referendum at the next election in an attempt to neuter the Ukip threat, which could damage Tory prospects in marginal seats and affect what could be a tight election.
Mr Cameron has dropped hints that he will offer a plebiscite as the “neatest” way of resolving Britain’s relationship with Europe, but has so far failed to commit to a poll.
Number 10 strategists note that while the EU may be unpopular with the public, the offer
of a referendum could create a harsh “tone” of debate about Europe, which swing voters find off-putting.
In the meantime, Mr Cameron hopes to satisfy his backbenchers by adopting a tough negotiating stance on the next EU budget, which is the subject of a special two-day summit in Brussels next week.
The prime minister was embarrassed a fortnight ago when Labour joined forces with 53 Tory rebels to defeat him in their attempt to force him to go further and call for a real-terms cut in the EU Budget.
Many Eurosceptic Tory MPs will meet for the annual Bruges Group dinner on Monday night, where they will discuss tactics ahead of the Brussels summit.
Ed Miliband, Labour leader, looks increasingly unlikely to offer an EU referendum – despite siren calls within his party – fearing it could consume huge amounts of political capital and time and could ultimately end in defeat for a pro-European Labour government.
“When there is a question about the economic future of Europe, how would it be helpful to have a referendum in which the second biggest economy in Europe is discussing leaving the EU?” said one aide.