Jeremy Corbyn's critics blamed him for defeat in Copeland, which saw the Conservatives' Trudy Harrison snatch a shock victory with a majority of 2,147.
But the bid by UKIP's leader - whose by-election campaign had lurched from one crisis to another - to win a seat in Parliament failed by 2,620 votes.
In Stoke-on-Trent Central, Labour's Gareth Snell, who had also attracted criticism for his own campaign, won comfortably with 7,853 votes to Mr Nuttall's 5,233.
Image Caption:Results of Copeland by-electionAfter a night of tension and high drama at the Copeland count in Whitehaven, Ms Harrison beat Labour's Gillian Troughton, whose by-election campaign was almost entirely about the NHS.
In a seat held by former Labour MP Jamie Reed at the 2015 general election with a 2,500 majority, the Conservatives increased their vote share by more than 8%, while Labour's was down nearly 5%.
Despite appalling weather brought to the Cumbrian constituency by Storm Doris, turnout in Copeland was a respectable 51.33%, above average for a by-election, though it was just 38% in Stoke-on-Trent Central.
After her relatively comfortable victory, which came after predictions at the count that the result was on a knife-edge, Ms Harrison told Sky News: "The people are ready for change".
"I think we ran an extremely positive campaign and it was a campaign that represented the needs of this area. And I know this area because I have lived here all of my life.
"I think that, and the combination of Jeremy Corbyn's views on nuclear in an area which is so dependent on Sellafield and on Moorside, contributed to my win tonight."
Minutes earlier, in her victory speech, in the Whitehaven Sports Centre, Ms Harrison - a mother of four daughters - said the result was a "truly historic event".
She said: "It's been very clear talking to people throughout this campaign that Jeremy Corbyn doesn't represent them.
"They want a party which is on the side of ordinary working people, which will respect the way we voted in the referendum and which will build a country which represents everyone. That's why they voted for me tonight."
Labour's defeat was embarrassing because it was the first by a Government over an Opposition in a by-election since 1982, when Labour was also split and led by an unpopular left-wing leader.
Then, under Michael Foot's leadership, 28 Labour MPs defected to the SDP and only one, Bruce Douglas-Mann, resigned and defended his seat in a by-election and was defeated by the Conservatives' Angela Rumbold in Mitcham and Morden.
Reacting to the by-election results, Mr Corbyn said: "Labour's victory in Stoke is a decisive rejection of UKIP's politics of division and dishonesty. But our message was not enough to win through in Copeland.
"In both campaigns, Labour listened to thousands of voters on the doorstep. Both constituencies, like so many in Britain, have been let down by the political establishment.
"To win power to rebuild and transform Britain, Labour will go further to reconnect with voters, and break with the failed political consensus."
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