Tory councillor Darren Gilbert, 22, was elected to represent Hatfield Central on Welwyn Hatfield Borough Council, Hertfordshire, last week.

The claims were allegedly made when he was employed by Tesco.

Council leader, Conservative John Dean, said: "Unfortunately, at his selection interview he failed to disclose certain aspects of his past employment."

In the two months since the end of February, when there was a change in the law, 137 businesses were caught employing illegal immigrants.

This is 10 times the number caught in 2007, and more than double the number prosecuted in the previous decade.

Employers face fines of up to £10,000 for each illegal immigrant they employ.

In the last two months fines of about £500,000 have been handed out. Persistent offenders also face a jail sentence.

It is not always easy for employers to tell whether someone is in the country legally.

The BBC spoke to one man, a restaurant owner in the home counties, who was recently fined £6,000 after four illegal immigrants were found working in his kitchen during a raid.

Faisal Ahmed told us that two of the men had only started working the day before and had provided P45 payment documents from their previous employer and had National Insurance numbers.

He said he assumed they were here legally.

The BIA now provides a phone number which employers can use to check the status of potential employees.

"If anyone comes here with a British passport how do I know if this is a fake passport?" he asked.

"I haven't got any kind of machine to check it. Now the court has given me some documents showing me how to check if I think there's anything dodgy."

Indian restaurant owners have started complaining that they are being targeted in the crackdown.

Raids often take place in the evening when restaurants are busy with customers.

They have to be closed down while the operations are underway and diners are sent home.

Restaurant owners say it is giving them a bad reputation at a time when they are finding it hard to recruit chefs from overseas because of much tighter immigration restrictions.

BBC research suggests Labour won 24% of votes cast in England and Wales, behind the Tories on 44% and Lib Dems on 25%.

So far Labour has lost 331 councillors and key councils like Reading. Tory gains include Bury and North Tyneside.

Labour -- with Brown leading them into elections for the first time since taking office last year -- is set to finish third behind the opposition Conservatives and Liberal Democrats, the BBC said.

The ruling party could face further humiliation in the tightly-fought London mayoral race, which pitched the current mayor, Labour's Ken Livingstone, against the Conservatives' maverick Boris Johnson.

Amid growing speculation Livingstone would be voted out as part of the backlash, Brown said he spoke to him last night and thanked him "for the campaign he has run and the message he has put across."

As the vote count continued -- the London result was not due until after 1600 GMT -- the BBC reported that Johnson was ahead, while betting firm Paddy Power said it was paying out on a Johnson win even before the result was known.

"After the kick in the ballots that Labour has had overnight, we expect Boris to put the final nail in their local elections coffin," said a spokesman for the firm.

Brown has been shaken in recent months by poor opinion polls and by lawmakers' dissent over tax reforms and plans to extend the period of pre-trial detention for terrorist suspects to 42 days.

It seems unlikely that he will face a leadership challenge in the wake of the results, but most commentators expect him to try and relaunch his government with a new policy programme.

While a Johnson victory would be another huge boost for the Conservatives, a Livingstone win could reassure Labour that their dip in form is only temporary.