Labour’s achievement in holding off the Scottish National party’s advance at Glenrothes is a personal boost for the prime minister and will give his party new heart.

It suggests voters may be more willing to give Gordon Brown credit for his handling of the global financial crisis than to blame him for leading the UK into recession.

Labour’s success also checks the momentum generated by Alex Salmond, Scotland’s first minister, ever since he led the nationalists to a narrow victory at last year’s Holyrood elections – ending nearly half a century of Labour domination of Scottish politics. 

Having lost the Glasgow East by-election to the SNP in July, Labour initially thought it had little chance of keeping Glenrothes when its MP, John MacDougall, died from cancer in August.

The SNP was riding high in the opinion polls and needed just a 14 per cent swing to take the seat – much less than the 22 per cent swing the nationalists achieved with their sensational victory at Glasgow East.

But that was before the banking meltdown that has caused the part-nationalisation of Scotland’s two biggest financial institutions, Royal Bank of Scotland and HBOS, which includes the 300-year-old Bank of Scotland.

The proposed rescue takeover of HBOS by Lloyds TSB and the forthcoming downsizing of RBS means Scotland is facing the prospect of thousands of redundancies.

Voters at Glenrothes were persuaded that at a time of such uncertainty they would be better to stick with the “safe pair of hands” of Mr Brown, who holds the neighbouring constituency of Kirkcaldy and Cowdenbeath.

The prime minister broke with the convention of staying away from by-elections to visit Glenrothes, as did Sarah, his wife.

Having run a shambolic campaign in Glasgow East, Labour organised a much more professional operation in Glenrothes to support Lindsay Roy, headmaster of Kirkcaldy High School, the prime minister’s old school.

Labour’s campaign focused relentlessly on charges imposed by Fife council, which the nationalists run in coalition with the Liberal Democrats. The SNP candidate was Peter Grant, the council leader.

Labour has struggled to adapt to being in opposition at Holyrood. But the longer the SNP is in power, the more of a record it has to defend – and the more opportunities Labour will find for attack.

However, Labour’s achievement in holding on to what has long been a safe seat should not be overstated. Mr Salmond has successfully positioned the SNP as the main destination for anti-Labour votes, given that the Conservatives show no sign of enjoying a “David Cameron bounce” north of the border.

The SNP leader hopes to win seats from Labour at the next general election – and could even hold the balance of power in a hung parliament.