UKIP's candidate Richard Elvin says coming second is "a message to all three mainstream parties that UKIP is the official opposition".
Speaking after the results, he said: "It's an absolutely fantastic result for UKIP. To come from nowhere to take 25 per cent at its first attempt is absolutely stunning.
"It's a message to all three mainstream parties that Ukip is the official opposition.
"We have proved that in Labour strongholds and we have done it again in South Shields."
Labour's Emma Lewell-Buck has made history tonight after becoming the first female MP in South Shields.
Results for local council ballots will be keenly studied in Westminster for pointers towards the 2015 general election.