UKIP leader Nigel Farage has warned David Cameron and Ed Miliband "we're after you" after the party claimed its first elected MP by winning 12,404 votes in the Clacton by-election.
Elsewhere, the party slashed Labour's majority in Heywood and Middleton to just 617 votes, which Mr Farage hailed an "absolutely astonishing" result.
Former Conservative MP Douglas Carswell won a landslide victory in Clacton, Essex, by securing 21,113 of the 35,386 votes cast.
UKIP also forced a recount in Heywood and Middleton, where Labour's Liz McInnes narrowly defeated UKIP's John Bickley.
Mr Farage said: "What it shows is that UKIP is now a truly national party - indeed we are the only party that can challenge in solid Tory and Labour areas.
Video: Inside The UKIP Party's Party
"I've no doubt this morning we'll hear, 'it's just a protest vote'. It's nothing of the kind. People from across the spectrum are saying. 'we've had enough of career politics'. They want to have a proper voice in Westminster.
"From today with Douglas Carswell they have got one, and in a few weeks time I believe they will have another in the shape of Mark Reckless, with another by-election coming up in Rochester and Strood.
"What we saw last night was the biggest and best night in UKIP's history
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Gallery: UKIP Surge In By-Election Results
UKIP has its first elected MP after Douglas Carswell took almost 60% of the vote in the Clacton by-election.
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Mr Carswell won the seat with a majority of 12,404 over the Tory candidate Giles Watling.
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Liz McInnes won the seat for Labour in the Heywood and Middleton contest, but its majority of almost 6,000 in 2010 was slashed to just 617 votes.
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On a turnout of just 36%, Ms McInnes won with 11,633 votes, defeating UKIP's John Bickley on 11,016.
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Ed Miliband's party's majority had been almost 6,000 in 2010, but a UKIP surge saw a 17.65% swing to Nigel Farage's party.
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A triumphant Mr Carswell said "there is nothing that we cannot achieve" after winning Clacton.
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UKIP's first elected MP to Parliament forced the election after defecting from the Tories.
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Mr Carswell was the favourite to win, but there were still nerves on the night.
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Mr Carswell took almost 60% of the vote.
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Mr Farage said: "Congratulations Douglas Carswell, a brave and honourable man who has a just reward."
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Ms McInnes won with 11,633 votes in Heywood and Middleton, defeating Mr Bickley on 11,016.
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Despite UKIP's loss in the Lancashire constituency, Mr Bickley told Sky News "the Labour vote had collapsed".
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Mr Farage went on to tell Sky News: "We are ripping lumps out of the old Labour vote in the north of England. The truth of what has happened in the North today is that if you are anywhere north of Birmingham, if you vote Conservative you get Labour."
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He added: "And the reason we haven't won up there, despite a fantastic campaign, is that too many people have stuck with the Conservatives, not recognising that UKIP is now the challenger to Labour in every urban seat in the north of England."
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Turnout in Clacton was 51.2%, while in Heywood and Middleton it was just 36%.
"We will now take the people's army of UKIP to the Rochester and Strood, and we will give that absolutely everything we have got."
Mr Farage earlier told Sky's Faisal Islam the strong UKIP result showed the Eurosceptic party was "ripping lumps out of the old Labour vote in the north of England".
Asked if he had a message for Mr Cameron, who turned 48 yesterday, and Mr Miliband, he replied, "we're after you", adding: "Happy Birthday to David Cameron, and Ed Miliband, you have underestimated us."
Video: By-Election Highlights
Mr Miliband, who would not be drawn on the nailbiting recount at Heywood and Middleton, said: "There won't be a shred of complacency from us as we reach out to all of those voters who didn't vote Labour and those who didn't vote at all."
Mr Carswell, who triggered the Clacton by-election when he defected from the Tories, said UKIP's success revealed a "profound change in British politics".
Speaking after the result was announced, he said: "We must be a party for all Britain and all Britons: First and second generation as much as every other. Our strength must lie in our breadth. If we stay true to that there is nothing that we cannot achieve."
Video: Speech: Douglas Carswell MP
Ms McInnes gained 11,633 votes in Heywood and Middleton, where voter turnout fell to just 36%.
In her victory speech, Ms McInnes said the by-election result was a win for the NHS.
"The people gave their backing to Ed Miliband's plans for an NHS with the time to care," she said.
Video: Interview: Labour MP
"They have rejected a Tory government that is only standing up for the privileged few."
Analysts say Labour's vote was damaged by the low turnout. Voter turnout was higher in Clacton, where 51.2% of voters cast their ballot.
Sky's Jon Craig said the dramatic decline of Labour's majority in Heywood would trigger further debate about Ed Miliband's leadership.
Video: Results: Heywood & Middleton
"UKIP have done better here than even they thought they would. They've come within a whisker of pulling off a sensational by-election victory," he said.
Voters in Heywood cast their ballot for a new MP following the death of Labour's Jim Dobbin last month, who held the seat from 1997 and was returned in 2010 with a significant majority.
UKIP's next target is Rochester and Strood, where defector Mr Reckless is hoping to return to Parliament following his defection.
Video: Who's Winning? Labour or UKIP
The by-election there is expected to take place early next month.
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