Alan Johnson, the cabinet minister widely tipped as a successor to Gordon Brown, prepared Labour for disaster at the polls as he predicted it would suffer the worst local and European election results in its history.

In a candid admission last night, the health secretary said he expected all three mainstream parties to do "badly" in Thursday's polls. But he believed that Labour would be hit hardest by the overwhelming tide of public anger over the MPs' expenses scandal. Raising his profile as a future leadership contender, he told the Observer: "If you are asking me for an honest assessment about whether recent events will have an effect, they are bound to, because we are the brand leader, we are the party of government and it will have more of an effect on us than the other parties."

Senior Tory sources predicted that Labour would suffer the humiliation of losing control of all county councils across the whole of England after Thursday. The Tory high command is confident of taking outright command of Lancashire and Staffordshire -two of the four councils that remain under Labour's power, and of depriving them of overall authority in the other two, Derbyshire and Nottinghamshire.

With the BNP close to winning at least one seat in the European parliament and Labour at risk of being pushed into third place by Ukip, activists are questioning whether Brown can survive an electoral massacre on the scale being predicted.

A Sunday Telegraph poll last night also revealed more people intend to vote Lib Dem at the next general election than Labour. The ICM survey put Labour in third place for the first time since 1987 on just 22% - three points adrift of the Lib Dems and 18 behind the Conservatives.

Eric Pickles, the Conservative party chairman, said Johnson was "clearly doing his best to lower expectations". But Labour did appear to have "given up" serious campaigning across large parts of the country. In last year's council elections, Labour slumped to the lowest level of support of any governing party in history.

Johnson accepted that Labour would take yet more punishment on Thursday. But he urged people to resist registering protest votes with extremists such as the BNP. "My message to those people who would normally have voted for a mainstream parties is 'don't change your mind because of allowances'. Registering your vote at what has gone on for a protest would just lead to a far worse situation where we have people who are full of hate representing us by default in the European parliament."

Last night Tory leader David Cameron was forced to defend his expenses claims after it was reported that he paid off a loan of £75,000 on his London home shortly after taking out a £350,000 tax-payer funded mortgage to pay for his constituency home in Oxfordshire. Cameron said his claims had been "perfectly reasonable".

In a sign of his frustration at Labour's failure to land blows on Cameron and Liberal Democrat leader Nick Clegg over the expenses scandal, Johnson said the two, whom he dubbed the "self-righteous brothers", had been allowed to take the moral high ground without being challenged over their own financial arrangements. "I am amazed about what an easy ride Cameron and Clegg have had over this whole issue," he said.