* Labour set for worst performance since 1935

* Candidates blame Corbyn and Brexit stance

* Defeat expected to trigger fresh internal battle (Adds quotes)

By William James

An exit poll and early results showed Prime Minister Boris Johnson’s Conservative Party were set for a resounding victory in Britain’s election, allowing him to deliver Brexit on Jan. 31.

That leaves Labour, a 100-year-old party born out of the trade union movement, wrestling with what went wrong and what to do about it.

Asked whether she thought she would hold on to her seat in the northern city of Stoke-on-Trent, a traditional Labour stronghold, the party’s candidate Ruth Smeeth bluntly replied: “I’ve definitely lost.”

She placed the blame firmly on Corbyn’s shoulders.

“He should have gone many, many, many months ago.”

The exit poll showed voters had gone with Johnson’s “Get Brexit Done” promise and pro-market philosophy and rejected left-wing veteran Corbyn, who had promised a second Brexit referendum and a radical expansion of the state.

Corbyn, an avowed socialist who took control of the party after a bruising 2015 election defeat, has shifted Labour sharply away from the centre ground that underpinned three Labour majority governments led by Tony Blair.

During four years in charge, the 70-year-old has built an ultra-loyal support base, pushing centrist members to the fringes and creating an ideological schism that critics say has alienated many of its traditional working-class voters.

An ardent pro-Palestinian activist, he has also been accused of failing to address accusations of anti-Semitism among his supporters.

“Corbyn was a disaster on the doorstep … everyone knew he couldn’t lead the working class out of a paper bag,” said Alan Johnson, who served as a senior minister under Blair.

HEARTLANDS DECLINE

Underlining the likely looming battle for the future of the party, Corbyn-loyalist Richard Burgon said the party should not turn back toward the centre-ground.

“We need to fight back, not triangulate,” Burgon, Corbyn’s justice spokesman, said.

“People on the doorstep weren’t complaining about our policies, and we wouldn’t have had the policies … if it weren’t for Jeremy’s leadership,” he said, blaming the focus on Brexit and negative media coverage of Corbyn.

But early results showed that Labour’s heartlands in former industrial areas of central and northern England – areas that typically voted for Brexit – had swung towards Johnson’s Conservatives.

Labour lost seats it has held for decades like Blyth Valley in northern England, which had been Labour since it was formed in 1950 and Wrexham, the Welsh seat that had voted Labour each election since 1935.

Corbyn did not address the exit polls as he arrived to hear the results in his own north London electoral seat, but weary Labour candidates taking in the scale of their defeat made it clear that he would have to face eventually.

“I am devastated, I don’t know how you could have any other reaction other than being utterly heartbroken,” Labour’s Jess Phillips said. “This is not a time for easy answers as much as I wish it was.” (Reporting by William James, additional reporting by Kylie MacLellan, Alistair Smout and Michael Holden; editing by Mike Collett-White)