The Scottish National Party will form Scotland's first ever majority government after a stunning election victory.

The party has reached 65 seats in the 129-seat parliament, with some counts still to declare, taking key seats in Labour heartlands.

The Liberal Democrat vote also collapsed, with the party returning four MSPs so far.

The SNP now has enough Holyrood votes to hold an independence referendum.

Labour leader Iain Gray announced he would stand down from the job in the autumn.

SNP leader Alex Salmond, whose party formed a minority government after the 2007 elections, described the unfolding Holyrood election results as "historic".

Prime Minister David Cameron also offered his congratulations to the SNP leader for an "emphatic win".

The reasons? A concatenation of circumstances which, combined, have given the SNP the most convincing and stunning victory in their history.

Among its successes, the SNP won all 10 first-past-the-post seats in the north east and still managed to pick up an additional regional list seat after amassing more than 140,000 votes.

Labour big hitters, including finance spokesman Andy Kerr and former minister Tom McCabe, lost to the SNP in the party's West of Scotland heartland, while, in Glasgow, the SNP won the Anniesland seat with a majority of just seven votes.

Mr Gray said he had spoken to Mr Salmond early on Friday to congratulate him on his victory.

He continued: "Labour has lost many talented representatives, and it seems very likely that Labour's new and returning MSPs will play their part in the democratic process in the Scottish Parliament from opposition, but will do so with gusto.

"Labour's MSPs will work constructively with the new Scottish government to create jobs and tackle unemployment wherever we can."

Professor John Curtice of Strathclyde University indicated that Labour appeared to have had its poorest performance in Scotland for at least 80 years.

He added it was fairly clear that the party's campaign had "badly misfired" and "badly missed its target".

Mr Gray was only narrowly re-elected as MSP for East Lothian with a majority of 151 votes, while his Lib Dem counterpart, Tavish Scott, also held on to his seat, despite losing 20% of his constituency vote in Shetland.

Scottish Tory leader Annabel Goldie returned to Holyrood on the west of Scotland list.