The unequivocal defeat leaves the UMP in control of just one of France's 22 regions, Alsace in the north-east.
While Sarkozy had tried to play down the implications of regional election results even before the polls had opened, arguing that the election was purely about regional issues and would have no national consequences, his political opponents were quick to stress that the electorate had cast a punitive vote on his government.
Indeed, eight of his own ministers, including Xavier Darcos (Labour), Valérie Pécresse (Higher Education) and Bruno Le Maire (Agriculture) were running for the presidency of various regions. None were successful.
Despite the poor performance, Prime Minister François Fillon is not expected to be replaced. A few ministers could lose their jobs in what one senior official predicted would be a "technical reshuffle".
The Union for a Popular Movement's (UMP) electoral defeat could undermine public support for Sarkozy's agenda of change on issues like overhauling the pension system and reining in France's public deficit, commentators said.
National Front scores high
Socialist victories were always likely in regions where the far-right National Front (FN) had scraped over the 10% threshold needed to stand in the second round.
The FN scored 9.4% of the national vote but took more than 22% in its two core regions in the north and south.
In the second round, the 81-year-old Jean-Marie Le Pen, the FN's founder, grabbed 23.8% of the vote in the Provence-Alpes-Côte d'Azur (PACA) region. In Nord-Pas-de-Calais, his daughter and party president, Marine Le Pen, did almost as well by securing 22%. Both of them sit in the European Parliament.
The UMP won back some of the votes lost to François Bayrou's MoDem (Mouvement Démocrate) in the first round. But that was insufficient as the centrist party managed a disappointing 4% at nationwide a week ago.
A warning message before 2012?
The vote, which was for regional assemblies that have little effect on national politics, was nevertheless inevitably interpreted in national terms, and is seen as a final warning from voters to Sarkozy before the 2012 presidential elections. Sarkozy is expected to run for a second term, but no clear opposition candidate has emerged so far.
The opposition must make sure that it is able to win not only "friendly matches," but the championship as well, socialist politician Pierre Moscovici said. He was referring to the fact that compared to the presidential elections, the regional poll is not seen as important by the majority of the French electorate.