The party began last night as campaigners against a directly-elected mayor celebrated the result of yesterday's referendum.

The better-financed Yes campaign, spearheaded by Lord Bassam and broadcaster Simon Fanshawe, was roundly defeated by voters.

The result, declared at the Brighton Centre, was 37,214 against and 22,724 for. Turnout was 31.6 per cent and 244 papers were rejected.

The 61.8 per cent of people who voted against was so decisive that the result will not be challenged.

Brighton and Hove will now have an improved version of the old committee system.

The city council will have to work out how this can be put into operation within the next few months.

In every other town and city polling on a mayor, the fallback position was for a leader and Cabinet system.

Greens had persuaded the city council to exploit a loophole in the Local Government Act allowing committees to be adopted.

The result was announced at the same time as five others, of which four were in favour and one, Sedgefield, was against.

A jubilant Francis Tonks, joint chairman of Allies for Democracy which ran the No campaign, said: "I am overjoyed and over the moon about this. It is a very definite victory for the improved committee system in Brighton and Hove.

"An elected mayor would have been a mini dictator taking powers away from the people."

Former Tory leader Geoffrey Theobald called for a draft version of a committee system, which was prepared last year, to be put back on the table.

Lib Dem group leader Paul Elgood repeated his call for a special meeting of the council to be quickly held to move towards the committee system.

The party pointed out that the result almost exactly mirrored a poll it carried out during the campaign.

The council's chief executive, David Panter, said: "It was a very decisive vote and I will now meet and work with all parties."

Labour councillor Jack Hazelgrove, who played a prominent part in the No campaign, said: "It is the people's wish, so we must consult the people."

Green councillor Keith Taylor said: "We must now work towards introducing a 21st Century committee system that involves all the people in a way that is democratic."

Roger French, who chaired the Yes For City Mayor campaign, said: "I am proud that we ran a positive, upbeat campaign that raised awareness of the need to modernise local government decision-making in our city.

"Unfortunately, we were unable to convince the majority of people who voted that only a directly-elected mayor could provide the strategic vision and leadership necessary to keep Brighton and Hove moving up.

"I hope everyone will now work together to ensure the new system will work well for the city."

Mr Fanshawe said: "This is a missed opportunity for Brighton and Hove as the important issue of how the city is governed will not go away."

Lord Bassam of Brighton said: "Naturally I am very disappointed. I think an elected mayor would have been a very exciting option but the electorate has rejected that decisively and as a democrat one has to respect the wishes of the majority."

He said he was worried a convoluted committee system would not allow important and vital decisions to be made on big issues such as waste, the future of the Brighton Centre, better transport links and a new community football stadium at Falmer.

Lord Bassam, a former council leader widely tipped to have been a candidate for the post, said the No campaign had wrongly persuaded people that the mayor would have had too much power and cost too much.

Labour councillor Kevin Allen said: "This is the end of the Bassam era in Brighton and Hove."