Legal challenges could be launched against close results in next week's local elections after the problems with postal votes, Charles Kennedy, the Liberal Democrat leader, said yesterday.

Although ministers said all postal ballots had now been issued to the Royal Mail, the Liberal Democrats and the Conservatives criticised the "incompetent" way the experiment had been conducted.

The Department for Constitutional Affairs has confirmed that 99 per cent of the ballot packs were delivered to the Royal Mail by the deadline of midnight on Tuesday, with the final one per cent sent out shortly after 5.00am yesterday.