Labour has made a number of gains in London including taking the Tory-led councils of Hammersmith and Fulham, and Croydon.
The party took 11 seats from the Conservatives to control Hammersmith for the first time since 2006.
Labour also gained Merton and Redbridge Councils.
The Tories have won Kingston Council from the Liberal Democrats, while holding Hillingdon, Wandsworth, Bexley, Westminster, Bromley and Richmond.
They have also held Kensington and Chelsea.
Redbridge, which was controlled by a Tory and Lib Dem coalition, is now under Labour control for the first time.
In Harrow, Labour have regained control of the council but have returned to the same level of support they had in 2010 before an internal row split the local group.
Labour has also held Barking and Dagenham, Brent, Camden, Ealing, Enfield, Greenwich, Hackney, Haringey, Hounslow, Islington, Lambeth, Newham, Southwark and Waltham Forest, while in Merton it gained control where previously no party was in overall control.
The party fell agonisingly short of taking majority control of Barnet Council for the first time. Despite gaining nine seats from the Tories, it fell just short of the 32 seats needed for a majority.
The party finished the night on 27 seats but with the postponed Colindale ward vote in June expected to return three Labour councillors, it has fallen just short of a majority.
The Tories will regain control of the council but with their number of seats slashed from 38 to 32, the minimum needed for a majority.
A controversial former Tory councillor who claimed to have slept with an Arsenal striker and alleged that Ted Heath was gay and went "cottaging" before becoming prime minister lost his seat on Barnet Council, winning just 265 votes.
Self-styled "King of Bling" Brian Coleman once served as chairman of the London Assembly and was a Conservative councillor in the borough before being suspended after assaulting a woman who filmed him breaking parking rules.
He had kept his seat as an independent after the incident.
The Liberal Democrats held Sutton. The Lib Dems lost 15 seats in Brent and are now left with just one councillor.
In Havering, there is still no party with overall control.
In the elections for a directly-elected mayor, Labour has won three with Sir Robin Wales being re-elected for Newham, Jules Pipe for Hackney and Sir Steve Bullock for Lewisham.
In Tower Hamlets, Lutfur Rahman of TH First was re-elected mayor on a second count.
Opposition councillors said they believed the grants were made in return for electoral support, claims categorically denied by Mr Rahman.
Following the broadcast, the Metropolitan Police was handed three files of material but said they contained "no new credible evidence of criminality".
BBC London's political editor Tim Donovan said: "This is the best performance that Labour have had in London since 1998."
Greg Hands, Conservative MP for Chelsea and Fulham and former Hammersmith and Fulham councillor, said Labour's campaigning had been "entirely dishonest" about the future of Charing Cross Hospital.
He said: "There are a lot of Labour lies about Charing Cross Hospital. The old building was going to be demolished but replaced with a new build hospital and A&E."
'Cameron's favourite council'
Labour's Stephen Cowan, the new leader of Hammersmith and Fulham, described Mr Hands's response to his party's defeat "as sour grapes" and denied lies had been told.
He said people had "voted Labour in David Cameron's favourite council", sending a clear message.
Andy Slaughter, Labour MP for Hammersmith, said the victory was "the most fantastic result we've had in London for years".
In Croydon, Labour leader Tony Newman said: "This is a real victory for positive change.
"We are ambitious for Croydon and will be cleaning up the borough and be providing jobs and homes."
Tory leader Mike Fisher blamed UKIP for the defeat, telling the Croydon Advertiser: "I believe many UKIP voters were Conservatives who were making a protest and I think they will now be horrified at what they have done."
UKIP leader Nigel Farage said the party had not had a "strong" performance in the capital and it needed to perform better next year.
He said: "Certainly London is a younger demographic but the real reason we are not as strong in London as we are just over the side of the M25, is political parties rely very heavily on voluntary structure and our structure in London is behind the rest of the country."
Results for the European elections will be announced late on Sunday.
- Harrow London Borough Council
- Lewisham London Borough Council
- Hackney London Borough Council
- Islington London Borough Council
- Redbridge London Borough Council
- Newham London Borough Council
- Waltham Forest London Borough Council
- Richmond upon Thames London Borough Council
- Lambeth London Borough Council
- Hillingdon London Borough Council
- Brent London Borough Council
- Bromley London Borough Council
- Hounslow London Borough Council
- Merton London Borough Council
- Enfield London Borough Council
- Ealing London Borough Council
- Sutton London Borough Council
- Bexley London Borough Council
- Kingston Upon Thames London Borough Council
- Hammersmith and Fulham London Borough Council
- Barking and Dagenham London Borough Council
- Haringey London Borough Council
- Greenwich London Borough Council
- Southwark London Borough Council
- Croydon London Borough Council
- Kensington and Chelsea London Borough Council
- Tower Hamlets London Borough Council