Singapore's ruling party suffered a rebuke on Saturday when it lost a parliamentary by-election despite promising more reforms and massive public spending to appease a restive electorate.
The opposition Workers' Party defeated the People's Action Party (PAP), which has been in power for more than 50 years, following a campaign dominated by issues including the rising cost of living and immigration.
Workers' Party candidate Lee Li Lian, 34, a middle-class corporate trainer, comfortably beat PAP candidate Koh Poh Koon, 40, a prominent surgeon who was strongly backed by Prime Minister Lee Hsien Loong.
"This is a devastating loss to the PAP," said Bridget Welsh, an associate professor in Political Science at the Singapore Management University.
"There's a gap between what ordinary Singaporeans are experiencing and what the government is telling them," she told AFP.
The prime minister congratulated the winner and said the PAP "will continue to work to improve the lives of Singaporeans, and present our report card for voters to judge in the next general elections."
The PAP has now lost two by-elections in less than a year, adding to its woes after suffering its worst performance in a general election in May 2011.
But it remains in firm control, holding 80 of the 87 seats in parliament despite its falling popularity. The next general elections are not due until 2016.
Saturday's hotly contested election turned a quiet residential suburb into the focus of a nation.
Two smaller opposition parties had also fielded candidates, raising hopes among PAP supporters that the opposition vote would fragment in its favour, but the Workers' Party won 16,038 votes to the PAP's 12,856.
MP Sylvia Lim, who chairs the Workers' Party, said the election was an "important episode" that showed "the value of political competition in getting the government to sit up and take notice".
The PAP, founded by the prime minister's father Lee Kuan Yew, who ruled for 31 years, has also come under attack for a rapid influx of immigrants accused of stealing jobs, driving up housing prices and straining public services.
After the PAP garnered an all-time low of 60 percent of all votes cast in the 2011 election, the government slowed down the intake of foreigners, who now make up a third of Singapore's population of 5.3 million.
It promised to spend billions of dollars to improve mass transport, expand public housing and give cash and other incentives for couples to have more babies and help reduce the island's dependence on foreigners in the long term.
Saturday's vote was called to fill a seat left vacant when parliament speaker Michael Palmer stepped down and quit the PAP in December after he confessed to an extramarital affair.
The Workers' Party now holds all seven non-PAP seats in parliament.
The PAP first came to power in 1959 when colonial ruler Britain introduced self-rule in Singapore, which became a republic in 1965 after a brief union with Malaysia.