Deputy Prime Minister Nick Clegg has been dealt a massive blow to his authority as his Liberal Democrat party suffered a bloodbath in elections in England, Scotland and Wales – and probable defeat on the totemic issue of electoral reform.

The Lib Dems admitted they had lost swathes of seats in former council strongholds in the north of England – such as Liverpool, Hull and Mr Clegg’s Sheffield – to Labour, while haemorrhaging support to the Scottish National Party north of the border.

A strong SNP performance in early results suggested Alex Salmond may be returning for a second term as First Minister at Holyrood with an overall majority which would allow him to press ahead with a referendum on Scottish independence.

A bitter war of words erupted between members of the Conservative/Liberal Democrat coalition as the results of the elections to English councils, the Scottish Parliament and Welsh Assembly came in. Former Lib Dem leader Lord Ashdown – a close ally of Mr Clegg – accused Prime Minister David Cameron of a “breach of faith” in permitting a largely Conservative-funded No campaign in the Alternative Vote referendum which targeted the Deputy Prime Minister.

And Lib Dem deputy leader Simon Hughes indicated the party would demand concessions on key issues such as NHS reform as the price for the Conservative conduct of the AV campaign. From early results, Labour appeared to be performing well in English councils, picking up 29 seats by 2.30am, while Tories dropped nine and the Lib Dems 11.

A senior Lib Dem source said the party was set to lose all its seats on Manchester council. Its leaders on Sheffield and Liverpool councils have also been kicked out.

It has been a “fairly disastrous” night which has seen a “bloodbath” in many areas, the source said. “We have been wiped out in the fights with Labour in the North. They have given us an absolute kicking.”

The source insisted that the party’s vote was holding up better in southern areas where it was competing against the Tories.

But there was bad news for Ed Miliband’s party in Scotland, where the SNP vacuumed up most of the voters who abandoned the Lib Dems, although Labour leader Iain Gray was re-elected, albeit with a majority of just 151 votes.