A senior Tory MP has predicted that Iain Duncan Smith will have a "second honeymoon" following sweeping gains in last week's local government election.

Whilst he conceded the party faced a huge challenge to unseat Labour at the next election, Tim Yeo said Thursday's results were surprisingly good"."I think most people have a pretty sober view of the scale of the challenge which faces us," said the shadow trade secretary.

"We've still got a mountain to climb but we've established a very important base camp this Thursday and I think what it's done is given Iain Duncan Smith a second honeymoon

"I think now people will have the chance to see what he can do on the back of some really quite surprisingly good results."

The intervention came after Duncan Smith dismissed the resignation of a senior Tory as "irrelevant".

The Tory leader claimed his party's gains in the local elections were a warning to Labour.

Addressing party workers outside Conservative Central Office, Duncan Smith said: "Across the board, that the British people are really sending a message to the prime minister and Labour Party, that this government is failing them."

"It is failing them because it is taking more and more in tax and it is delivering less in services. They are saying enough is enough."

Party sources say Duncan Smith's leadership is stronger than ever following the election result.

They played down the impact of Crispin Blunt's botched attempt to overthrow the leader.

As the polls closed on Thursday Blunt launched a withering attack which threatened to overshadow the local and devolved elections.

"Whatever the headline results in today's local elections the fact is the Conservative Party is making no real progress when we should be taking advantage of the opportunity our opponents and events have offered," he said.

"If the electorate perceived us as a credible alternative government the potential support for us could carry us back to government.

"However we carry the handicap of a leader whom Conservatives in parliament and outside feel unable to present to the electorate as a credible alternative prime minister."

Blunt added that Duncan Smith had "not made the necessary impact" and should go.

"If we are a political party that is serious about regaining power, our leader has to now be replaced," said the MP in a statement.

"I hoped the leader could recognise this analysis himself."