LONDON (Reuters) -- New Conservative leader David Cameron declared himself a happy man on Friday as he reflected on his first electoral test, saying his party had now broadened its appeal and was "on its way back".

With most local election results in on Friday, the Conservatives had gained 250 council seats across England and secured control of key areas in London. "I'm feeling very positive," the 39-year-old Cameron told BBC Radio. "These are very strong results for the Conservative Party."

Prime Minister Tony Blair reshuffled his Cabinet on Friday after the Labour Party recorded one of its worst defeats in a local election since coming to power in 1997.

Labour had a net loss of 256 of the 4,360 council seats contested. Analysts had said anything over 200 seats would be a bad result for Labour.

Cameron said the reshuffle had come too late.

"I don't think this reshuffle will be enough. What we need in this country is not a reshuffle of the government. We need a replacement for the government," he told reporters.

"What I am pleased about is that there is now a strong Conservative alternative that is building support across the country, that can be that alternative when the general election comes.

In the changes announced on Friday, Home Secretary Charles Clarke will be replaced by Defense Secretary John Reid, while Foreign Secretary Jack Straw will be replaced by Environment Secretary Margaret Beckett.

Cameron, who became party leader in December 2005 following three straight election defeats for the Conservatives, said he still had a lot of work to do.

For example, the Conservatives failed to win any seats in Manchester, Liverpool or Newcastle.

"We've been absent for too long (in urban areas) and you don't change these things overnight," he said. "It's a patient process of hard work. "Is it now an easy walk forward for the next few years and go on to win the next election? Absolutely not, we've got a lot more work to do."

Analysts said the Conservative results showed the party was making gains but most agreed much remained to be done.

Cameron, who is trying to transform his party into a modern, more inclusive political force, focused his campaign on environmental and local issues rather than the traditional Tory subjects of immigration and crime -- alienating some members of his party. "Those who don't like Cameron will say it's not good enough and the pro-Cameron group will say it's better than they've done for the past 15 years," YouGov pollster Peter Kellner told Reuters. "It will reinforce the existing positions."