British Prime Minister Gordon Brown, boosted by his response to the financial crisis, confirmed his fightback on Friday when his Labour Party held on to a parliamentary seat in Scotland.
Just months ago, some Labour members openly questioned his leadership after the party lost a string of elections and fell way behind in the polls.
But Mr Brown's handling of the financial crisis has lifted him in the polls, despite economists warning that Britain is on the brink of recession.
The Scottish National Party reduced Labour's majority in Glenrothes, which borders Mr Brown's own constituency, but the ruling party held on to the seat by a comfortable margin of more than 6,700 votes.
The SNP, which wants Scottish independence from England, had been hoping to repeat its stunning performance in another parliamentary election in July, when it overturned a huge Labour majority, casting Labour into despondency.
Since then, Mr Brown has won praise internationally and at home for a billion-pound package of loans and guarantees to prop up the financial sector.
"With Gordon Brown, interest rates are at a record low, helping hard-working families. With Gordon Brown, Labour has won here in Glenrothes," Labour candidate Lindsay Roy, the head teacher at Brown's old school, said in his victory speech.
The election was held on Thursday as the Bank of England slashed interest rates by 1.5 percentage points to their lowest level in more than 50 years and when the International Monetary Fund forecast that Britain would suffer a deeper recession than leading industrial rivals next year.
The by-election was held after the death of sitting Labour MP John MacDougall.
Result in full
Lindsay Roy, Labour: 19,946
Peter Grant, SNP: 13,209
Maurice Golden, Conservatives: 1,381
Harry Wills, Liberal Democrats: 947
Jim Parker, Scottish Senior Citizens Unity Coalition: 296
Morag Balfour, Scottish Socialist Party: 212
Kris Seunarine, UKIP: 117
Louise McLeary, Solidarity: 87
Labour majority: 6,737
Turnout: 52.34%
