Labour should "seriously consider" ditching Gordon Brown following the Henley by-election drubbing, the party's former chief fundraiser Lord Levy said.

The Prime Minister was given an electoral mauling in Henley on Thursday, with Labour finishing fifth - behind the Greens and BNP - and losing its deposit.

The seat, vacated by London mayor Boris Johnson, was held by the Conservatives and David Cameron said the emphatic win showed his party was a credible alternative government.

In an interview for BBC2's Newsnight, Lord Levy said it was for Labour Party members to decide whether Mr Brown should be sacked.

But, he added: "I certainly, seeing the polls, would have to say that this is something that needs to be very seriously considered."

Mr Brown, on a visit to Manchester to launch his new public services reform programme, said: "By-elections come and by-elections go."

He added: "Of course we have to listen to what people say.

"But my main job is to improve our public services, to get the economy moving forward, to make sure that in the health service and education people have the best services that they want and I am going to continue to do that.

"And I think people know that we are going through difficult times in the economy. It's my job to steer us through these difficult times.

"And people facing higher petrol bills, higher gas and electricity bills, people facing high food prices, it's my job to make sure I can do more to help people's standard of living improve."

Mr Cameron said the by-election was "disastrous" for Labour and he said he was heartened that, for the first by-election in a long time, the Tory candidate also picked up votes from the Liberal Democrats.