The Liberal Party has ignored pressure from Prime Minister Scott Morrison, and recent polls, to reject a female candidate for the crucial Wentworth by-election.

Former Australian ambassador to Israel, David Sharma, was pre-selected to contest Malcolm Turnbull’s east-Sydney seat, despite Canberra lobbying for a woman to be picked.

Mr Sharma emerged victorious after a marathon vote that stretched into the early hours of Friday morning to beat seven other candidates, including Katherine O’Regan, who had the backing of Mr Morrison.

The ABC reported that Mr Sharma took the spot with 119 votes in the final round after he and Woollahra councillor Richard Shields emerged as the final two candidates. Liberal Party insiders were quoted as saying there were “201 voters”.

The Coalition now faces a tough by-election battle to retain the desperately-needed seat on October 20, with early polling indicating a major swing against the Liberals, who have never lost in Wentworth.

Scores of party faithful filed into the Eastern Suburbs Rugby Union Club in Rose Bay to decide who would contest the seat, only emerging seven hours later.

Ms O’Regan was Mr Morrison’s preferred candidate. Photo: AAP

Ms O’Regan was originally tipped to get the Liberal Party nod after frontrunner Andrew Bragg pulled out of the contest under mounting pressure from Canberra, but it was Mr Sharma who emerged the winner at 1.30am.

“We have a tough fight ahead of us to hold onto this seat, but I’ll be throwing my all into it and I believe we can retain it and retain a Liberal government in Canberra,” Mr Sharma told reporters.

Mr Sharma is understood to have come under pressure to pull out of the pre-selection battle as party power brokers pushed for a woman to be selected.

But former prime minister Malcolm Turnbull reportedly called Mr Sharma from New York, urging him to stay in the race amid mounting pressure to bail out.

He was also encouraged to stand firm by former prime minister John Howard, Fairfax media reported.

Mr Turnbull tweeted his congratulations from New York on Friday morning.

Congratulations from Lucy and me to @DaveSharma – new Liberal candidate for Wentworth. As a diplomat Dave has represented Australia magnificently overseas, and now if elected will make a great contribution in our national parliament.

— Malcolm Turnbull (@TurnbullMalcolm) September 13, 2018

Mr Bragg quit the race on Monday, saying he hoped it would pave the way for a woman. It is also understood he agreed to pull out in exchange for a safe spot on the party’s Senate ticket.

Polling commissioned by Mr Bragg suggested a woman had a better chance of winning the by-election, and also indicated the seat could be lost to a strong independent.

Same-sex marriage campaigner and City of Sydney councillor Kerryn Phelps is still considering a tilt at the seat, but is yet to confirm her intention to run.

Pre-selection candidate and former member for Wentworth Peter King said he respected the party’s decision, but wasn’t surprised a man was selected in the end.

“The decision was made on the merits and that’s the way it should be,” Mr King told AAP as he left the rugby club.

Labor has selected businessman and Tamarama Surf Lifesaving president Tim Murray to run in Wentworth.

Mr Morrison said pre-selectors had a very important job, given the “very difficult” circumstances around the by-election.

“I think this is going to be a very close fight,” he told reporters on Thursday.

-with AAP