Mr Vajpayee's party is ruling out early general elections

Supporters sang and danced into the early hours after the results were announced on Thursday.

The vote was the last big test ahead of general elections due by next October.

Congress had held all four states which were up for grabs - it lost Rajasthan, Madhya Pradesh and Chhattisgarh but held on easily to the capital, Delhi.

It is the hard reality of economics that is driving the political system Commerce Minister Arun Jaitley

On Friday, Raman Singh was appointed the new chief minister of Chhattisgarh.

In the other three states, women are in charge: Vasundhara Raje and Uma Bharati will lead BJP administrations in Rajasthan and Madhya Pradesh respectively, while Sheila Dikshit stays in charge in Delhi.

Congress dismay

It was evident early on during the count that Congress, led by the Italian-born Sonia Gandhi, had lost three of the four states following voting on Monday.

Many Indian newspapers say the result has shattered any hopes the party had of forming the next government.

"The Congress's dilemma is that without Sonia Gandhi there is not just no recognisable leader, but that there is no recognisable party either," The Times of India said in an editorial on Friday.

The BJP rose to prominence in India espousing strongly pro-Hindu policies.

But observers say it downplayed its Hindu nationalism during these elections and that issues such as good governance and development strongly influenced the voters.

Federal Commerce Minister Arun Jaitley said economic reforms now had popular support.

"These elections have shown that governance and issues which touch the lives of people such as water, power, roads and connectivity can be decisive," he told reporters.

'Backlash' against incumbents

Despite its successes, BJP leaders are ruling out the possibility of bringing forward next year's general elections.

HAVE YOUR SAY These polls were focused more on local issues Gautam, India/USA Send us your comments

When Prime Minister Atal Behari Vajpayee was asked if early elections were likely, he said: "Still one year is left".

Mr Vajpayee admitted the result was a surprise, as he had expected the BJP and Congress to come away with two states each.

A Congress spokesman said the vote was part of a natural backlash against the party that had been in power.

"This is an anti-incumbency vote," said spokesman Jaipal Reddy. "Nothing more should be read into it."

BBC News Online's Soutik Biswas in Delhi says the results will be a big blow to Sonia Gandhi - they will rekindle debate about her leadership of the Congress Party, but she is unlikely to face any serious challenge to her position.

Eyes on general election

Some 52 million people cast their votes in the four states.

In the central state of Madhya Pradesh, Congress chief minister Digvijay Singh conceded victory to his BJP rival, Uma Bharati, one of India's most controversial and charismatic right-wing political leaders.

"People have voted for a change, let there be change," Mr Singh said.

BJP leader in Rajasthan, Vasundhara Raje Scindia, celebrates

Cheering crowds of supporters gathered in Bhopal, the capital of Madhya Pradesh, to greet Ms Bharati's helicopter.

Her helicopter hovered over the throng for 10 minutes, showering them with colourful petals.

Ms Bharati, a former Hindu nun, said she owed her victory to "God, voters and the party workers".

About 400,000 security personnel were deployed for the state elections, which were marred by sporadic violence.

The average turnout was 56.25% - the highest being in Rajasthan and the lowest in Delhi, where just 48-50% voted.

The state battles were seen as straight fights between the BJP and Congress.

However, correspondents say next year's national polls will be very different, given the presence of many regional players.