Newly elected independent Kerryn Phelps has pushed back against Labor’s call for an early election, saying the Coalition should serve a full term unless there are “exceptional circumstances”.

The Liberal Party suffered a swing of almost 20 per cent against it in last night’s Wentworth by-election, with Dr Phelps claiming victory, meaning the Morrison Government loses its majority of one in the House of Representatives.

Dr Phelps has claimed victory in the by-election, but the margin narrowed to fewer than 900 votes this morning as postal votes are counted.

Mr Sharma conceded defeat last night, but this morning Prime Minister Scott Morrison said “we will simply wait for that normal democratic, robust and credible process to follow its course”.

“It is down to just over 800 votes and if it gets as close as 100 then an automatic recount is triggered under the normal rules,” he said. “I am not saying it will get to that.”

The count narrows: AEC’s tally of votes has reduced the TPP result to just over one per cent as of late Sunday morning. Chart: AEC.

Labor’s Manager of Opposition Business Tony Burke said the Coalition told voters that an independent victory in Wentworth would bring more uncertainty to Canberra.

“Now, if that’s [Mr Morrison’s] position, that means he has actually spent this whole campaign arguing that if we got the result we got last night, it would cause instability in people’s lives and in the economy,” Mr Burke told Insiders.

“I don’t see how he can argue that and then not say we have to have an election.”

Losing a majority in the House of Representatives does not necessarily spell the end for the Government, but the Opposition will test Mr Morrison’s control of the House.

The Opposition would still need an absolute majority of 76 votes to throw out the Government’s agenda in the House, which means one Government MP would still need to cross the floor.

Dr Phelps did not give a commitment to voting with the Government on motions of no confidence, stating that she would need to consider each vote on its merits.

“All governments should go full term unless there are exceptional circumstances, and the next election is due in May next year and that’s time enough,” Dr Phelps said.

“We saw last week a kind of recklessness with people voting on motions they hadn’t read and didn’t understand and that’s not how I operate.

“I need to have evidence, I need to see a full brief, I need to know what I am voting on, and talking about voting one way or another on a hypothetical motion in the future would be careless.”

Treasurer and Deputy Liberal Leader Josh Frydenberg said the by-election result was “deeply disappointing” and the Liberal Party needed to “cop it on the chin”.

Mr Frydenberg said the party was “absolutely” punished for tearing down Malcolm Turnbull’s prime ministership, and that the party was already seeking assurances of support from crossbench MPs.

“We are not going to be in a situation of chaos, we are going to be in a new world without a clear majority on the floor of the house,” Mr Frydenberg told Sky.

“That being said, history shows that governments without a clear majority can run for a number of years.”

The Treasurer said he did not believe the Wentworth by-election result would have any sway on the timing of the general election, which must be held before May next year.

“Bill Shorten can take no comfort out of last night’s result — he couldn’t even show his face in Wentworth, which shows his perspective in Canberra,” he told Sky.

-ABC