Opposition Leader Peter Dutton has vowed to rebuild the Liberal Party into an “election-winning machine” after suffering a catastrophic and historic loss in the Aston by-election.

The Liberals on Saturday night conceded defeat after Labor earned a surprising swing of a predicted six per cent to secure a once-in-century win.

As Labor candidate and “suburban mum” Mary Doyle celebrated victory, it was the first time since 1920 that a government had won a seat off the opposition in a by-election.

Former Liberal strategist Tony Barry told the ABC the result was “cataclysmically bad” for the Liberal Party.

Disastrously for the Liberals, the party has lost the once-safe blue seat in Melbourne’s outer east for the first time in 30 years, leaving them with just three federal seats in Melbourne.

Election analysts late Saturday were predicting Labor would take Aston with a swing of more than six per cent, holding 53 per cent of the two-candidate preferred vote to the Liberals’ 47 per cent.

At the close of counting Labor had secured 41 per cent of the primary vote to the Liberals’ 38 per cent and the Greens’ 11 per cent.

Political watchers had expected the Liberals to retain the seat in line with historical trends.

Aston was held by the Liberals on a 2.8 per cent margin after former minister and outgoing member Alan Tudge suffered a large swing against him at the 2022 election.

Test of Dutton’s leadership

The Liberals’ candidate for Aston, Roshena Campbell, conceded defeat on Saturday night, fronting the party faithful alongside Mr Dutton.

The Aston by-election, which was triggered by the resignation of former Liberal minister Alan Tudge, was widely considered a test of Mr Dutton’s leadership.

But as the conservatives prepare to face serious soul-searching, Mr Dutton signalled his intention to stay put and vowed the party would come together and rebuild.

Mr Dutton acknowledged it was a “tough night” for the Liberals, but said it wasn’t the party’s first.

The Liberals would listen to the people of Aston and grow stronger from the result, he said.

“We will work toward the next election to make sure that we’re in a much better and stronger position by the time of the next general election,” Mr Dutton said.

“We gather together now, we rebuild, and I promise you we will never give in.

“I will make sure we build this party into an election-winning machine by 2025.”

Doyle: ‘We were the underdog’

Ms Doyle, a breast cancer survivor and former unionist who failed to take the seat at the last election, said even the most “optimistic true believers” had her pitted as the underdog in the Aston campaign.

“We were the underdog but boy, have we shown that we have a big bite,” she told the party faithful.

“Even after the excellent result we had at the election last year, what we were trying to do hadn’t been done for 100 years.”

Addressing her supporters she said: “You guys, wow.”

“I am Mary Doyle. I’m a suburban mum and I’ve lived in the outer eastern suburbs for more than 35 years and as of tonight, I guess I’ll be your next Member for Aston!”

Prime Minister Anthony Albanese congratulated Ms Doyle, saying she had “made history”.

“The people of Aston have spoken. They want to strengthen a government prepared to face the challenges of today and build for a better future,” he posted on Twitter.

Deputy Prime Minister Richard Marles hailed the election result as a “huge endorsement” of Mr Albanese and Labor’s focus on “bread and butter” issues.

Mr Marles said voters had responded to Mr Albanese’s “serious and sincere” leadership and a government that was working to ease cost of living pressures.

Liberals: ‘No mood’ for new leader

An early swing towards Labor foreshadowed the Liberals’ demise in the mortgage-belt electorate, where both Ms Doyle and Ms Campbell campaigned on cost of living pressures.

As the outcome became clear, federal Liberal MP Keith Wolahan issued a plea to his party to come together.

He also stood by Mr Dutton’s leadership, adding: “I saw good and bad leaders in the most trying of circumstances and he has all the qualities of a good leader.”

His comments were backed by fellow Victorian and senator Jane Hume, who said she “cannot imagine there would be any mood in the party room for (a change of leader)”.

“There is no doubt this is a blow but he is a leader with a solid team behind him,” she told the ABC.

-with AAP