Labour leader Keir Starmer has said the party must “learn lessons” after a policy to expand London's ultra low emission zone cost it a by-election win.
He said there was "something very wrong" when a Labour policy was on "each and every Tory leaflet".
Mr Starmer said Labour's win in Selby and Ainsty in Thursday's by-elections gave the party “every reason to be confident" about its prospects in the next national election.
But the result in Uxbridge and South Ruislip, in west London, demonstrated that there "is still a long way to go".
Labour overturned a 20,000 majority to win the Selby seat in north Yorkshire with a 23.7 percentage points swing away from the Conservatives, the second largest by Labour at a by-election since 1945.
But it narrowly lost Uxbridge and South Ruislip after the Conservatives managed to cling on to former prime minister Boris Johnson’s old constituency.
The Ulez car emission scheme introduced in 2019 by London’s Labour Mayor Sadiq Khan is set to be expanded to the capital’s outer boroughs at the end of August.
It has proved hugely divisive as it will cost some drivers thousands of pounds a year just to use their car.
Addressing the party's national policy forum in Nottingham on Saturday, Mr Starmer said: "That result in Uxbridge demonstrates there is never any reason to be complacent and never a reason to rest on our laurels.
"It is a reminder that in an election, policy matters.
"We are doing something very wrong if policies put forward by the Labour Party end up on each and every Tory leaflet.
"We've got to face up to that and to learn the lesson."
The opposition leader urged the forum, which is debating potential manifesto ideas, to stay "disciplined" as he warned that the Tories were likely to seize on rogue policies during next year's likely general election campaign.
Mr Starmer said London's mayor should "reflect" on the expansion of Ulez after new Tory MP Steve Tuckwell painted the vote as a referendum on the toll.
Separate from the congestion charge, which is aimed at reducing traffic, Ulez is designed to cut air pollution in the capital by discouraging the use of high-emission vehicles through imposing a daily fee.
It runs 24 hours a day, seven days a week and aims to improve the health of Londoners by reducing the amount of particulate matter and nitrous oxide in the air.
Generally, petrol cars registered after 2005 and diesel cars registered after 2015 meet the emissions standards.
Cars older than this are charged £12.50 a day with a penalty for non-payment of up to £180.
Mr Khan plans, pending a court challenge, to expand the zone from its current borders of the North and South Circular roads to encompass the outer London boroughs on August 29.
Labour candidate Danny Beales, who cut the Tory majority from 7,200 to less than 500 votes, had called for Ulez's expansion to every London borough to be delayed during the campaign.
According to HuffPost, Mr Beales told Labour's policy forum that the environmental proposal designed to cut air pollution "is bad policy".
Mr Beales reportedly told the conference that "a single policy cut us off at the knees" and "acted as a dead-weight" when canvassing for votes ahead of Thursday's polling day.
"You cannot tell working people you are laser-focused on the cost of living, on the difficulties facing them, on making life easier and then also penalise them simply for driving their car to work," Mr Beales was quoted as saying.
Mr Khan's team said nine out of 10 cars driving in outer London were already compliant with Ulez regulations and would not be charged.
A source close to the Labour mayor said winning Uxbridge "was always going to be a struggle", pointing out that Tony Blair did not turn it over during his 1997 landslide.
"It is a disappointing result and Sadiq has been clear he is listening to Londoners following this by-election," the source said.
"Sadiq has always said that expanding the Ulez was a really difficult decision, but necessary to save the lives of young and vulnerable Londoners."
Following the Uxbridge win, Conservative Party leader Rishi Sunak is facing calls from members of his party to water down promises designed to help the UK meet its pledge of having a net zero carbon economy by 2050.
Health minister Maria Caulfield said the Tory government was committed to a mixed energy economy - with new oil and gas licences being approved along with moves to develop renewable energy - as she swerved questions on whether policies such as the phasing out of gas boilers by 2035 should be postponed.
While Mr Sunak avoided a triple by-election defeat, the ruling party saw heavy losses inflicted by voters in what were once considered safe seats.
As well as losing in Selby, the Tories came second in Somerton and Frome, in the South-west, with the Liberal Democrats turning a 19,000 blue majority into an 11,000-vote cushion for new MP Sarah Dyke.
Mr Sunak, according to an ally of the Prime Minister quoted in The Times, is preparing to approach next year's likely election with "more political edge" in recognition that "substantive issues", such as Ulez in Uxbridge, can help the Tories win.
The newspaper said Mr Sunak is planning to focus on "divisive" issues, such as crime, cracking down on small boats of migrants arriving in Britain, and transgender rights, to claw back ground from Labour which is well ahead in opinion polls.
