Farage said his party were now "serious players" after taking votes from the three main parties, posing a headache for Prime Minister David Cameron ahead of general elections in May 2015.
Elections for some local councils in England and Northern Ireland were held yesterday alongside the European parliament vote, the results of which will not be announced until Sunday.
"The UKIP fox is in the Westminster hen house," a beaming Farage said today as the first results came through.
Cameron has promised an in-out referendum on Britain's EU membership in late 2017, largely to see off the perceived threat of the eurosceptic UKIP on the right.
In results from 132 out of 161 councils in England available at 1600 GMT, UKIP had gained 146 council seats, having previously held just two, although it did not actually control any city halls.
The main opposition Labour party led by Ed Miliband gained 260 seats, lower than the party had hoped for.
Turnout was a relatively weak 36 percent according to initial estimates.
A projected national share of the vote in a Britain-wide election suggested that Labour would have got 31 per cent, ahead of the Conservatives on 29 per cent with UKIP on 17 per cent and the Liberal Democrats on 13 per cent.
Farage will be hoping to win his party's first seat in the British parliament next year.
Cameron said he still believed the Conservatives could win a majority at the general election but admitted there was voter frustration with the mainstream political parties.
"The economy is growing, we are creating jobs, but we have got to work harder," he said.
Labour leader Miliband rejected criticism of his leadership style after the party failed to make its expected gains.
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