LABOUR and the Conservatives have launched power sharing talks to take over in Pendle.
After losing seven seats, including that held by leader Alan Davies, the Liberal Democrat group lost control of the council.
The election left the Liberal Democrats with 20 seats and Labour and the Conservatives with a total of 26.
Speaking immediately after the elections Mohammed Iqbal, leader of the Labour Party, said he would be talking to the Conservative leader.
But a few hours later said the alliance was only one possibility'.
Coun Iqbal stressed that there was 'no chance' of any power sharing agreement between them and the Lib Dems.
This appears to leave the door open for power sharing between Labour and the Conservatives.
Conservative Leader Anthony Beckett said they would be in talks with all the parties for politically balanced sharing', but not a coalition agreement.
Coun Iqbal said his party tended to do well in Pendle when the national party was facing difficulties.
After the election he said: "The results were fantastic for the Labour Party.
"I will be talking to the Conservative Party leader.
"I am prepared to work and get the best for the people of Pendle."
But later he added: "I will be discussing what to do next with my colleagues.
"A power sharing agreement with the Conservatives is one possibility."
Coun Beckett, leader of the Conservatives said he was delighted with the election.
He said: "We will talk to anybody in relation to politically balanced sharing.
"I shall be talking with all three parties going in with an open mind and see what everyone has to say.
"If the Liberal party say we do not want to play we would then have the choice made for us."
Coun Tony Greaves, who successfully defended the Waterside ward, said the Conservative party, which won two extra seats, had spent a lot of money in Pendle.
He said: "The council has been thrown into chaos because with the numbers we have makes it diffuclt to for anyone to claim an outright majority.
"We are expecting an unholy alliance between the Tories and Labour.
"As regards what will happen with our leadership we will go in on Monday and discuss what we will do next."
Overall, there were gains for Labour, Conservatives, BNP and an independent. The Liberal Democrats remain the largest group.
Other Liberals who lost their place were Nelson Committee chairman David Foster, Shelley Franklin from Barnoldswick - who was beaten by independent Glenn Whittaker - and Judith Robinson from Nelson's Southfield Ward.