The Runcorn and Helsby by-election is on a knife edge, with just four votes separating Reform UK and Labour, the BBC has been told.
A full recount is taking place, after party officials said the first tally put Nigel Farage’s party ahead by a tiny margin.
The by-election – Sir Keir Starmer’s first major electoral test as prime minister – was triggered by the resignation of former Labour MP Mike Amesbury, following his conviction for assaulting a constituent.
Farage said Labour had asked for a recount but he was “confident” of a Reform victory, which would be the party’s first by-election win and take its number of MPs to five.
Candidates gathered with election officials as bundles of ballot papers were checked.
One party member was seen holding up four fingers to a colleague, before a recount was confirmed.
The narrowest by-election result on record is in Berwick-upon-Tweed in 1973, when the Liberals won by only 57 votes.
Earlier, Labour held the North Tyneside mayoralty by just 444 votes, with the party seeing its share of the vote fall significantly and Reform coming a close second.
Reform is still hoping to make further gains in the Greater Lincolnshire mayoral contest, as well as in council elections, where most counting is starting later.
Reform’s deputy leader Richard Tice told the BBC he believed the party’s candidate in the Greater Lincolnshire mayoral race, Andrea Jenkyns, had won “by a considerable margin”.
The party is also targeting councils including Kent and Lincolnshire, where the Conservatives currently have large majorities, while it is aiming to make gains at the expense of Labour in areas like Doncaster.
In the Hull & East Yorkshire mayoral contest, it could be a closely fought race between the Tories, Labour, the Lib Dems and Reform’s candidate, former Olympic boxer Luke Campbell.
Support for Reform UK has been rising in national polls since last year’s general election, when the party secured more than four million votes, coming third behind Labour and the Conservatives.
You can follow all the results and reaction on BBC One and on iPlayer, the News Channel, Sounds and on the BBC live page.