By Andrew Osborn LONDON (Reuters) - The anti-European Union UK Independence Party made big gains in local elections, grabbing support from Prime Minister David Cameron's Conservatives in a vote that underlines widespread frustration with Britain's traditional parties. Early results showed UKIP had won 42 council seats - as many as the opposition Labour party - after seven of 34 councils had been declared. Full results of the elections in England and Wales are expected later on Friday.

Britain would get a big economic boost if it left the European Union, former finance minister Nigel Lawson said on Tuesday, fuelling the debate about a referendum on British membership. Writing in the Times newspaper, Lawson insisted that "the case for exit" was now clear and urged Britain to sever its 40-year association with Brussels. "In my judgement the economic gains would substantially outweigh the costs," wrote Lawson, who is the most senior member of Prime Minister David Cameron's Conservative Party to call for Britain to leave the EU.

Britain's eurosceptic and anti-immigration UK Independence Party will cause an "earthquake" in European 2014 elections, its leader predicted Sunday after its success this week in local polls, piling pressure on Prime Minister David Cameron. Nigel Farage also confirmed that he would stand in Britain's next general election in 2015 as UKIP seeks to translate growing public support into seats in parliament at the expense of the three main political parties.

The British government is to delay plans for a new state-backed press watchdog after newspapers rejected the proposal and published their own version, Prime Minister David Cameron's office said on Friday. Cameron's Downing Street office said it was forced to postpone its bid for a beefed-up new regulator, which was drawn up in the wake of the phone-hacking scandal at Rupert Murdoch's News of the World tabloid, to allow more time to consider the newspapers' alternative charter.