The Liberal Democrats have secured a narrow win in the Eastleigh by-election despite the recent scandals, while the UK Independence Party has pushed the Tories to the third place piling more pressure on David Cameron.
Lib Dem candidate Mike Thornton got 13,342 votes in the Hampshire seat while the Ukip's Diane James got 11,571 votes followed by the Conservative candidate Maria Hutchings who secured 10,559 votes.
Hutchings came second in the 2010 general election and the vote share had fallen by 14 percent. Labour's John O'Farrell came fourth with 4,088 votes.
The by-election was called following the resignation of Lib Dem MP Chris Huhne.
"If the Conservatives hadn't split our vote we would have won. What happened here in Eastleigh was not a freak result. Something is changing. People are sick and tired of having three social democrat parties that are frankly indistinguishable from each other," said the Ukip leader Nigel Farage after his party's vote share rose 24 percent from the previous election.
The jubilant Ukip candidate James said the by-election result was "a humongous political shock."
Meanwhile, Thornton in his acceptance speech said it was a "great night" for his party.
"A strong signal of support for (leader and deputy prime minister) Nick Clegg, an affirmation of our role of national interest within the coalition and a huge boost to our party's mission in government to build a stronger economy in a fairer society so that everyone can get on in life," said Thornton, the borough councillor for more than six years, and who has been living in area for nearly two decades.
Ahead of the election, Tory backbencher David Davis had warned Cameron that it would be a "crisis" if the party was forced to the third place.
However, soon after the election outcome, Conservative Party chairman Grant Shapps denied that the Tories' votes had "collapsed" saying: "Ukip are the obvious protest vote in this election. Really what we need to do is redouble our efforts, so that by the next general election we have a story to tell which is all about... how the Conservative Party is leading the charge to put us in the right place on the issues that really matter."
Shapps also insisted that in the next general elections "voters will make a choice between whether they wanted David Cameron or Ed Miliband walking up Downing Street."
Mike Thornton (Lib Dem) - 13,342
Diane James (Ukip) - 11,571
Maria Hutchings (Conservative) - 10,559
John O'Farrell (Labour) - 4,088
Danny Stupple (Independent) - 768
Dr Iain Maclennan (National Health Action Party) - 392
Ray Hall (Beer, Baccy and Crumpet Party) - 235
Kevin Milburn (Christian Party) - 163
Howling Laud Hope (Monster Raving Loony Party) - 136
Jim Duggan (Peace Party) - 128
David Bishop (Elvis Loves Pets) - 72
Michael Walters (English Democrats) - 70
Daz Procter (TUSC) - 62
Colin Bex (Wessex Regionalist) - 30