Just five years ago they were written off as a spent force, but on Sunday they stunned Labour and Conservative by coming third in a nationwide election. Nick Morrison looks at the rise of the UK Independence Party and what it means for the future of British politics.

IF the public displays of allegiance were anything to go by, only one party was taking part in the European elections. Once you got out of the towns and cities, and into the lanes and byways, the "Just Say No" signs were peppering the countryside.

And on Sunday it paid off, as the UK Independence Party - or UKIP - became the third largest party in a national election, with 16 per cent of the vote, pushing the LibDems into fourth place. Of the nine English regions, only the North-East did not return a UKIP MEP.

The party's best showing was in the East Midlands, where it came within a whisker of beating the Tories, and its star candidate, former MP and television presenter Robert Kilroy-Silk, became one of its 12 MEPs, up from three at the last election.

It is a dramatic reversal of fortunes for the party written off just a few years ago. Acrimonious splits in the wake of a poor showing in the 1997 General Election, when they were overshadowed by Sir James Goldsmith's Referendum Party, saw them seemingly condemned to a perpetual life in the shadows, but three seats and seven per cent of the vote in the 1999 Euro elections saw the start of a revival.

This year, UKIP spent £2m on their election campaign, more than five times their expenditure five years ago and more than all the other parties, bolstered by wealthy donors including Yorkshire businessman Paul Sykes and retired bookmaker Alan Bown. But even then UKIP's most optimistic forecasts aspired to just eight or nine MEPs.

According to Dr Anthony Zito, lecturer in European politics at Newcastle University, UKIP's success is down to a number of factors, not all of them equating to support for the party's central policy - withdrawal from the European Union.

He says the presence of a recognisable name, in Kilroy-Silk, gave them valuable publicity in a low-key campaign, and a mid-term and comparatively meaningless election gave voters a chance to vent their dissatisfaction with the three main parties.

"A lot of people don't see a vote for any of the smaller parties as making a big difference to them, and most of those people will probably vote for the major parties in the general election," he says, a view supported by UKIP's performance in the 2001 general election, when its vote fell from seven per cent in the Euro poll two years earlier to just 1.5 per cent.

But he says it would be wrong to read support for UKIP as demonstrating an increasing desire for Britain to leave the EU. "Certainly there is a strong unhappiness about where the UK stands in relation to the EU, but it is more about registering unhappiness with the major parties rather than withdrawal from the EU."

Not surprisingly, UKIP sees it rather differently. Charlotte Bull, the party's North-East organiser, says the elections shows that UKIP's message about what the EU is doing is getting through to the electorate.

"We are giving people information about what the EU is and what it has done, and the fact it is responsible for so much of what happens in Britain. People didn't know all these things, and the shock of what they have learned has made people vote UKIP," she says.

"Part of what we're saying is that people have been deceived, not just by Labour but by the Conservatives, and people are beginning to not trust politicians as much now.

"It is a little bit of a protest vote, but I'm absolutely sure that nobody has voted UKIP just because they don't like the Labour Party, otherwise they would have voted Conservative."

She recognises that UKIP has been seen as a party of the south, hence its failure to win seats in the North-East, but says the campaign saw its membership in the region rise from 400, out of a national total of around 20,000, to over 1,000. Internal infighting has also hampered UKIP's development in the North-East.

Although UKIP has a full range of policies, with a general theme of cutting down on the number of regulations governing our lives, it stood in the Euro election on the single issue of withdrawal from the EU. But the party seems to be uninterested in playing a constructive role in the European Parliament. Prior to Sunday, its three MEPs were largely anonymous, and as far as Kilroy-Silk is concerned, his objective once he gets to the European Parliament is to "wreck it".

As far as the impact of UKIP on Europe is concerned, Dr Zito's judgement is that it will be minimal, with its 12 MEPs too isolated to make any difference. But at the national level, he says it will put pressure on the Conservatives to take a more hard-line stance on Europe, although it will stop short of withdrawal.

Tory leader Michael Howard may have to reverse his policy of deriding UKIP as "cranks and gadflies", even though some of its high-profile supporters have attracted ridicule. Along with Kilroy-Silk, sacked from his chat show after making racist comments, there was Piers Merchant, standing in the North-East, who resigned as an MP after he was linked with a 17-year-old nightclub hostess, Geoff Boycott, convicted of beating up a girlfriend, and former Cabinet minister Jonathan Aitken, who was jailed for perjury.

Celebrity endorsements have come from former Dynasty star Joan Collins, actor Edward Fox, Sir Patrick Moore and former motor racing champion Stirling Moss.

Martin Callanan, Tory MEP for the North-East, acknowledges that UKIP took much of its support from the Conservatives, but, as a Eurosceptic, it is his wing of the party which can expect to predominate as a consequence of the election result.

"It is all a protest vote, and people know it is not going to change the Government. The only people who can change the British relationship with the EU are the Conservatives," he says.

"We need to have a big internal debate about where we go from here, because there is going to be a serious threat at the next general election if we don't.

"Polls regularly indicate that 40-45 per cent want to pull out of the EU, but I think there is a better way, which is to renegotiate our relationship to have a free trade area and scrap the rest of it. It is not a question of being hard-line; it is coming up with appropriate policies."

Mr Callanan puts UKIP's comparative lack of success in the North-East down to voters knowing there is a pre-existing Eurosceptic choice - him - but, perhaps not surprisingly, the successful LibDem candidate, Fiona Hall, says her election is proof the arguments over Europe are not being lost in this region.

She says the election has clarified the split in the Tories, between its Eurosceptic and Europhile wings, but is not dismayed by her party being pushed into fourth place nationally.

"There is a huge problem in that people don't understand how things work in Europe, and we need to raise the level of awareness of what is going on," she says.

Perhaps of wider significance is the effect on the run-up to the expected referendum on the EU constitution next year. For Tony Blair, the result is hardly welcome news as he prepares to agree the constitution this week, although ironically, it may give him more negotiating power, if he needs to be seen outflanking the Eurosceptics at home.

"The pro-EU campaign has not really been very strong, and UKIP's success is digging a bigger hole for them to get out of," says Dr Zito. "The No message will always be simple, and this result adds momentum to that.

"The pro-EU camp has got an uphill struggle to sell the case for Europe, trying to compete against this momentum, and that will have a substantial impact over the next year."