Britain's Liberal Democrats, punished in local elections for their role in an austerity government, looked set on day to see their hopes of electoral reform crushed in a referendum.

The junior coalition partners suffered huge losses across England in Thursday's election, while Prime Minister David Cameron's conservatives survived largely unscathed.

Lib Dem leader and Deputy Prime Minister Nick Clegg said his party had taken the brunt of the blame for the deep spending cuts introduced by the year-old coalition to rein in Britain's record deficit.

"We have taken a real knock," Clegg said.

In elections to the Scottish Parliament, first minister Alex Salmond's hopes of holding a referendum on independence were boosted after his governing Scottish National Party (SNP) won a second term with a surge in support.

Clegg looks set for even more humiliation when results are announced on day in the referendum on whether to switch to the alternative vote (AV) system for electing lawmakers to the British Parliament, in which candidates are ranked by preference.

Bitter campaigning for the vote opened up a rift between the centre-right Conservatives and the centrist Liberal Democrats almost exactly 12 months since they joined forces in a bid to sort out Britain's record deficit.

Cameron's Conservatives back the current first-past-the-post system, in which the candidate with the most votes wins, while Clegg led the campaign for the introduction of AV.

Clegg was left licking his wounds as senior party figures said trust between the two parties had been badly damaged by the rancorous referendum campaign.

"We've clearly had bad results overnight and we now need to learn the lessons, get up, dust ourselves down and move on," Clegg said.

"Where there is real anxiety about the deficit reduction plans that we are having to put in place, we are clearly getting the brunt of the blame."

The Lib Dems suffered crushing losses in the major northern cities of Manchester and Liverpool.

Party deputy leader Simon Hughes suggested that as a result of the sniping over the referendum, his party would now only implement policies that are explicitly in the coalition agreement and refuse to go along with anything outside it.

Former leader Paddy Ashdown said the party's "trust" in Cameron had been damaged by the "scaremongering" and "personalised politics" of the campaign.

"It has been so far a relationship lubricated by collegiality, congeniality and trust. There will be less of that now."

The referendum and local elections were the first major electoral test for the coalition since it started pushing through cuts to tackle the record deficit, but the campaigns largely failed to interest the public.

However, the bitter war of words between the conservatives and Liberals nevertheless garnered headlines.

The referendum was held alongside elections for the devolved national assemblies of Scotland, Wales and Northern Ireland, plus for local authorities in England and Northern Ireland.

In Scotland, where the SNP has been running a minority government for the past four years, it pulled off what Salmond called a "stunning victory", taking a string of seats off the main opposition Labour Party.

"We will take that mandate and that trust forward. We will take it forward to increase the powers of our Parliament," Salmond said, calling for extended borrowing powers and corporation tax control.

He pledged to bring forward a referendum on Scottish independence within the next four years, something he could not deliver in his first term as the SNP were outnumbered by unionists in the Holyrood assembly.

"Just as the people have bestowed trust in us, we must trust the people as well, and that is why in this term of the parliament we shall bring forward a referendum and trust the people with Scotland's own constitutional future."