Control of Walsall Council was in limbo today after Labour became the largest party on the authority – but failed to win overall control.
Days of talks are now expected and parties could be forced to seek alliances to help determine who will take charge.
Across the region there were major Conservative losses as the party lost its grip on power in many councils in the West Midlands.
Labour won a majority in Cannock Chase having been a minority administration for the past year.
The biggest shock was in Dudley, which was won by Labour as 13 Tories lost their seats.
Labour also ousted the Tory Liberal Democrat coalition in Birmingham and held on to Sandwell.
In Walsall, Labour won three seats from the controlling Conservative group but lost two, leaving them on 28.
The Tory group, which had been running the authority as a minority administration, now has 24 seats and the Liberal Democrats remain on five.
There are now two independent candidates, while Democratic Labour councillor Pete Smith also won back his seat.
Incoming mayor Labour's Graham Wilkes for Darlaston South was beaten by Independent candidate Chris Bott.
Willenhall South was held by Labour's deputy leader Sean Coughlan.
Labour also gained Brownhills, as Steve Wade overcame Conservative councillor Alan Paul.
All the parties are holding behind-closed-doors group meetings tonight to discuss their options.
Labour leader Tim Oliver has already said his group will be launching a challenge for the leadership.
Unless the party takes control as a minority administration, it will be forced to seek alliances with others.
Conservative leader Mike Bird said the loss of three seats was "disappointing" but said it "could have been worse".