Labour MPs have warned that their party risks "electoral disaster" in 2020 amid signs the electorate is increasingly voting along the faultlines of the Brexit referendum.

The warning came after Labour slipped from second place to fourth in a Westminster by-election in Lincolnshire.

The result appeared to show the Tories holding off a challenge from Ukip for the pro-Brexit vote.

But pro-EU voters threw their weight behind the Liberal Democrats instead of Labour.

Labour insiders now fear the party could lose swathes of seats across England, in an echo of what happened in Scotland after the independence referendum.

Jeremy Corbyn's party suffered a 7 per cent slump in its vote to finish behind Ukip and the Liberal Democrats in Sleaford and North Hykeham.

It came second in the same constituency at last year's general election.

As expected, the Conservatives held the seat by a comfortable majority, seeing off a challenge from Ukip, who saw their share of the vote drop by just over two per cent.

Senior Labour MP Vernon Coaker, who resigned from Mr Corbyn's shadow cabinet earlier this year, said that a focus on Brexit during the campaign had damaged his party.

"The challenge for us was because of Brexit. Everything was about Brexit," he said.

"The messages about the A&E, the NHS, the messages about infrastructure, all of that got lost to an extent in the swirl around Brexit."

Labour's David Winnick said it was an "appalling" result for his party.

"If we were to continue in this way then the indications are 2020 will be an electoral disaster and the possibility of a Labour government very remote indeed.

"The sort of bunker mentality that seems to exist at the moment at the highest levels of the party needs to recognise what is happening in the outside world."

Former chancellor George Osborne said: "The disintegration of the Labour Party is not good for democracy. Oppositions are meant to try to win by-elections, not slip from second to fourth."

Shadow health secretary Jon Ashworth said Labour should have done better: "I think we do have to confront Ukip. I think we do have to take the threat from Ukip very seriously."

Deputy Ukip leader Peter Whittle said: "The Labour Party has almost no message on Brexit and this is why, increasingly, it is traditional Labour voters who are coming over to us.

"And, I think we have the opportunity, particularly with our new leader Paul Nuttall, to transform British politics again, having done it once with the referendum - now we are in Act Two for our party."