London was there for the taking by Labour. That's twice Labour has thrown away power by allowing tightly-knit groups of politically motivated men to manipulate the choice of Labour champions in crucially important contests for social democracy in England.
First they couldn't summon the will to rid themselves of Brown as an inappropriate Leader (inappropriate Chancellor of the Exchequer did the more damage to us all but that's another matter) and he lost them the UK election. Now they've failed to gain London (Livingstone's previous term in office was not a Labour term but a last fling for other left forces) because another inappropriate candidate imposed himself. The comrades in Europe must be aghast (social democracy being what it is, the ultimate internationalist movement). All their hopes for re-taking widespread positions of authority and influence in a post modern political elitey way now rest on Hollande, and future co-operation and reinforcing support is compromised.
Of the two losses - the UK and London - it is London that is the greater. Power, like culture, goes where the money is. London ( devolved in the same manner as were Scotland, Wales and Northern Ireland but with many of the powers suppressed by the Blair administration when Livingstone took it in 2000) could recover those powers over some forms of taxation, health, education, infrastructural investment, relations with other devolved regions both within and outside the UK.
New Labour - the UK's local social democratic elites - intended devolution to be the permanent denial of power to the centre right ( the Conservatives here); they must bitterly regret the regionalisation and other mechanisms they put in place to safeguard themselves against democracy that have now fallen to the centre right. Pity they failed to safeguard themselves against putting up wrong'uns and throwing away the loyalty, conviction and hard work of social democracy's supporters.