Victoria is facing days of political uncertainty under a caretaker government after an inconclusive state election which left neither side with the clear majority needed to govern in its own right.

Labor has leaked first-preference votes to the Coalition, suffering a 6 per cent drop in its primary vote, and the ABC election computer is predicting the Coalition will form government.

But with heavy rain and the threat of flash floods keeping the turnout under 60 per cent in some seats, and more than half a million pre-poll votes yet to be factored in, the official result is still too close to call.

Premier John Brumby said his Government would continue in a caretaker mode until the official result was declared.

But Opposition Leader Ted Baillieu said Mr Brumby had lost the authority to govern and said he stood ready to lead his Liberal/Nationals Coalition into government.

And Mr Baillieu's Coalition partner, Nationals leader Peter Ryan, accused Mr Brumby of being in denial about the scale of Labor's defeat.

Addressing the Labor faithful at Broadmeadows Town Hall late on Saturday night, Mr Brumby said Victorians were "most likely" looking at a hung parliament.

Admitting his government had been punished by voters, he asked for another chance to lead the state.

"This was always going to be a very, very, tight, and a very, very, close election. That's exactly what it is," he said.

"I'm more determined than ever that we deliver strong and stable government to the people of Victoria, should we be given the opportunity to govern for the four years ahead.

"I know that we have been sent a loud and clear message. I have heard that message. Our government has has heard that message.

"There are things that we can do better .. I want to stress to the people of our state that we know we can do better in government."

Mr Brumby said the counting of some 550,000 pre-poll votes would not begin until Monday and said his government would serve in a caretaker role until the official result was in.

'Authority removed'

Mr Baillieu took to the stage at a hotel in Melbourne's CBD shortly afterwards to cheers and loud chants of "We want Ted."

With heavy rain continuing to pound the streets of Melbourne, he urged supporters to taste the "refreshing rain of renewal."

"As you know the final election outcome may still be uncertain," he said.

"But what is clear is that there has been a huge swing against the Labor Government.

"Labor's vote has collapsed [and] many many Labor MPs have only survived only on the back of Greens preferences.

"The Victorian people have removed the authority of this government and the authority of Mr Brumby as premier.

"We presented a clear and stable alternative to the people of Victoria. That alternative has been very strongly embraced by the people of Victoria.

"This has been a stunning result. The election may not yet be over, but I can assure you we stand ready to govern.

"The election's not over, the count goes on, and we want to make Victoria a great state again."

Mr Ryan, whose party is predicted to have 10 seats in the new parliament, turned his fire on the Labor leader.

"The reality is that by most standards this has been an unmitigated disaster for the Labor Party," he said.

"For Mr Brumby to speak in the manner he did tonight is a denial of reality as it crashes around him."

In key developments:

Labor suffered a swing of about 5 per cent to the Coalition.

Labor suffered a swing of about 5 per cent to the Coalition. Melbourne's suburbs led the revolt against Labor.

Melbourne's suburbs led the revolt against Labor. The Greens failed to take an inner city seat as had been predicted.

Of the 6 per cent drop in Labor's primary vote, 3 per cent went to the Liberals, 2 per cent to the Nationals, and 0.7 per cent to the Greens.

The ABC election computer had the Coalition gaining 13 seats, with the Liberals taking Bentleigh, Burwood, Carrum, Forest Hill, Frankston, Gembrook, Macedon, Mitcham, Mount Waverley, Prahran, Seymour and South Barwon from Labor and the Nationals gaining Gippsland East from independent Craig Ingram.

The Labor seats in doubt were Albert Park, Ballarat East, Eltham, Macedon, Monbulk and Narre Warren North.