Liberal John Alexander has been comfortably returned by the voters of Bennelong, restoring the Turnbull government’s lower house majority and sparing the Prime Minister a potential body blow to his leadership.

Instead, in a huge boost for Malcolm Turnbull, Mr Alexander cruised to victory in the culturally diverse seat in Sydney’s north-west despite a two-party preferred swing of about 5.5 per cent on a two-party preferred basis to Labor’s star candidate Kristina Keneally.

About 7.45pm, the ABC’s election expert Antony Green projected Mr Alexander would win the contest. The former tennis star had 54.1 per cent of the two-party preferred vote by 10pm.

“Thank you to the people of Bennelong, the people of Bennelong who put their faith in this man, John Alexander,” a delighted Mr Turnbull told Liberal Party supporters at an event in West Ryde.

Addressing the jubilant crowd about 9.20pm, a more sombre Mr Alexander described the byelection as “regrettable” but said it had been a “unifying” moment.

“Malcolm, this is the renaissance of your leadership,” he said.

In a slightly rambling speech, Mr Alexander did not acknowledge Ms Keneally in the wake of a campaign that turned nasty in its final week.

The former tennis star is also likely to be criticised over an anecdote he told on Saturday night. While playing professional tennis he had briefly become eligible for a disabled sticker, he said, but rejected it, telling the doctor, “I still have some pride”.

"The doctor suggested I apply for a disability sticker and I said 'no! I still have my pride' – @JAforBennelong

Those who use the ACROD card (like me) have nothing to be ashamed of. Those who peddle the idea that disability=weakness, do.
Apologize. Now.#BennelongVotes #auspol

— Senator Jordon Steele-John (@SenatorJordon) December 16, 2017

Keneally concedes

Speaking to supporters in Ryde about 8.40pm, Ms Keneally sounded an optimistic tone, congratulating Mr Alexander but saying there was a strong swing to Labor in the “safe Liberal seat”.

“Friends, unfortunately I am not here tonight to claim victory in Bennelong,” the former New South Wales premier said. “But I am here to claim success for the Labor movement.”

Opposition leader Bill Shorten hailed the result was an “election winning swing” at the next federal poll, which must be held before May 2019.

Despite the swing against Mr Alexander, he appeared to benefit from the preferences of Liberal defector Cory Bernardi’s new party, Australian Conservatives, which garnered just less than 5 per cent of the primary vote. Labor’s first preference vote was up about 7 per cent.

In the campaign’s final days, Mr Turnbull sought to highlight the consequences of a loss in Bennelong for the stability of his government, which has been down to 75 seats after Mr Alexander resigned over dual-citizenship concerns. He admitted a loss would bring Mr Shorten “very close to becoming Prime Minister”.

Once former Prime Minister John Howard’s seat, Bennelong was a blue ribbon Liberal electorate until Labor’s Maxine McKew unseated Mr Howard in 2007.

Hoping for a shock upset, Labor argued the byelection was a referendum on the Turnbull government, with Ms Keneally repeatedly telling voters the poll was a chance to “send a message to the Prime Minister”.

Labor also attempted to portray the government as “Chinaphobic”, seizing on Mr Turnbull’s criticisms of suspected political interference by Beijing’s Communist Party government.

Defence Industry Minister Christopher Pyne said on Saturday night that Labor’s “Chinaphobia” attack had “backfired”.

Byelections have generally seen a two-party preferred swing against the government of about 4 per cent, according to the Parliamentary Library.

Ms Keneally faced speculation in the campaign’s dying days that she might take up the Senate seat vacated by Labor powerbroker Sam Dasytari, who resigned last week over his links to Chinese donors.