A BY-ELECTION descended into 'shambles and farce' after the winning candidate declared himself ineligible for the seat hours after the polls opened.
One witness said the scene at the Blackburn with Darwen count as returning officer Harry Catherall read out the numbers of votes cast was 'scarcely believable'.
Labour candidate Adam Holden topped the poll over Conservative and UKIP candidates.
However, Mr Catherall immediately declared the election 'null and void' after revealing Mr Holden had disqualified himself because he is employed by a firm owned by Blackburn with Darwen Council.
Opposition leader Cllr John Slater called the election a 'scandalous waste of resources and an insult to the electorate'.
Labour officials have been accused by leading Tories of 'bumbling incompetence' which would cost council tax-payers in the borough 'a significant amount of money'.
Chairman of Blackburn Labour Party, Cllr Damian Talbot, who apologised to voters, said the mix-up was the result of 'a genuine, honest mistake' and pledged that it would be a 'learning exercise for future selections'.
Mr Holden is employed by Accrington-based Growth Lancashire, formerly Regenerate, which provides free business support and financial help for business growth projects.
The council is the accountable body for the firm making him disqualified from being a councillor in the borough.
It is understood that Mr Holden, of Ingleby Close, Blackburn, a former student of Our Lady and St John school and a graduate of Blackburn College, declared himself ineligible on Thursday afternoon, hours after the polls opened.
The by-election was triggered by the death of sitting Labour councillor Don McKinlay in January.
Mr Catherall, who is also the council's chief executive, said: "I was not in a position to confirm the election of Mr Holden following the announcement of the by-election result for the Highercroft Ward.
“Mr Holden gave me an explanation of his oversight late on Thursday.
He advised me that he had made a genuine mistake with regards to his eligibility to stand and that this had been brought to his attention earlier in the day.
"I will now make arrangements to re-run the election in due course."
The election count at Blackburn Town Hall took place on Thursday evening with the votes cast for Adam Holden, declared as 446, UKIP's Ian Grimshaw came second with 169 votes and Conservative Maureen McGarvey got 133 votes. The turnout was 14.8 per cent.
A number of candidates and officials present at the count were unaware of the eligibility issue.
Conservative agent Cllr John Pearson said: "We were puzzled that the Labour candidate wasn't present but what happened was scarcely believable.
"The polling stations had been set up and manned all day, people had counted the votes, ballot papers and notices had all been published.
"The costs must run into thousands of pounds. Labour's bumbling incompetence has cost council taxpayers dear and now the election will have to be re-run."
Cllr Slater said: "This comes at a time when our Labour-run council is putting council tax up five per cent.
"It's an appalling shambles and a farce.
"Week after week we hear Labour blaming central Government for their wastefulness. Let's see them blame them for this.
"The council tax payers of Blackburn and Darwen will now have to shoulder a significant sum for another election due to their shoddiness.
"This kind of shambles wouldn't have happened on Jack Straw's watch. It's an insult to the electorate."
Cllr Talbot said: "Sadly late on the afternoon of election day we and the council were notified of a challenge to the eligibility of our candidate.
"The outcome of which is that the election result has been declared null and void.
"As the information only came to light on the day of election it was not possible to prevent the election going ahead.
"These circumstances are very unfortunate and were the result of a genuine honest mistake.
"Adam does not work directly for the council but he is an employee of a publicly funded organisation of which Blackburn with Darwen is the accountable body.
"The council have been advised that under electoral law this disqualifies Adam from being a candidate.
"This is a complex matter and raises new issues about the eligibility of potential candidates working in a variety of fields.
"We accept that on this occasion the selection of Adam as candidate was a mistake and would like to take this opportunity to apologise to voters.
"This will be a learning exercise for future selections."
Blackburn Labour Party said Mr Holden was unavailable for comment.