Former council leader Jenny Dawe and transport leader Gordon Mackenzie were voted out along with 11 of their colleagues, leaving the party in disarray with just three elected members.
A jubilant Labour – now the largest party with 20 of the 58 seats – was today holding crunch talks at the City Chambers with all parties over forming the next five-year administration.
Labour narrowly defeated the SNP in the battle for the final ward, although leader Andrew Burns has said he is open to working with all parties including their arch rivals.
The Nationalists increased their vote and secured 18 seats. However, leader Steve Cardownie only just scraped in after a high risk gamble to get a second SNP candidate in the Forth ward backfired.
Dozens of voters are said to have intentionally defaced their ballot papers to voice their anger at the handling of the over-budget tram scheme.
One voter in the Forth ward wrote a short essay on the back of the ballot paper asking why the public had not been given their say on the project while another in Almond wrote “none of these, scrap the trams now”.
Following the result, Lib Dem national leader Willie Rennie said of the trams: “People have punished us for it, there’s no doubt about it.”
Gordon Mackenzie, the city’s transport leader for the past five years and a Southside/Newington councillor for the past decade, said the Lib Dem collapse and the loss of his own seat was closely linked to the project.
He said: “I got the feeling that things were going badly against us. I’m sure a lot of people have expressed their dissatisfaction for a number of candidates [in all parties] and for us it was London and the trams.”
Voter turnout was the lowest since the city council was formed, at 42.6 per cent. It dipped as low as 10 per cent at one polling station at The Inch.
Across the Lothians the Liberal Democrat vote collapsed. The worst result was in Pentland Hills where a candidate dressed as a penguin Professor Pongoo – independent environment activist Mike Ferrigan – polled 444 to Stuart Bridges’ 370.
In East Lothian the party had six councillors after the last election but two defected previously and the remaining four have now lost their seats. In Midlothian they had had three after 2007 with one defecting previously and the remaining two being voted out yesterday. Talks are also set to begin in councils in the three Lothians councils, in which no party has overall control. Of the 58 councillors elected to the city council, 25 were newcomers.
These included helicopter rescue pilot David Key for the SNP and the city’s youngest councillor, political researcher Nick Cook, 24, for the Tories, who secured an unexpected win in Liberton/Gilmerton, a ward not known for its Conservative support.
The three remaining Lib Dems in Edinburgh are long-standing councillor Robert Aldridge, former social care and housing leader Paul Edie, and Alastair Shields, their only new elected member and at 27 one of the youngest councillors.
They face an uphill fight to rebuild the party over the next five years although they could yet feature in a coalition if the larger parties struggle to form a majority.
Speaking as he was narrowly re-elected after six stages of counts, Cllr Edie said: “My dad was a bomber pilot and he said any landing you could get was a good one.”
He added: “We were hit with the twin things – reaction to being in government and the trams played a big part as well.”
Despite her colleagues placing heavy emphasis on the tram project, Jenny Dawe, a retired government statistician who has led the Lib Dems since 1999 and a been councillor since 1997, said voters had told her Nick Clegg’s coalition with the Tories in Westminster was the deciding factor. She said: “[Trams] wasn’t mentioned very much on the doorstep but clearly there were ballot papers which had the trams written on it.
“If somebody doesn’t approve of the trams they have the right not to vote for anybody because all the major parties at some stage had voted for the trams. It was a project that we inherited, [but] we voted for it in the beginning, we managed to turn it around and get things going the right way now. And I guess the next administration will reap the benefit of the five years and hard work and integrity we’ve put into running the council.”
Cllr Cardownie, who remains SNP leader, said despite failing to become the biggest party, the Nationalists had done “tremendously well”, increasing its number of councillors from zero in 2005 to 12 in 2007 and now to 18.
He claimed a handful of votes the other way could have left Labour and the SNP with an equal number of seats or handed the SNP the advantage.
He said: “It’s hardly a landslide victory for Labour.”
Labour leader Andrew Burns, who is likely to become city council leader, said: “The result is an endorsement of the positive message of our campaign. We had a difficult five years in opposition but I think we have gone a long way to rebuild trust with the electorate.”