Independent candidate for Wentworth Kerryn Phelps has lodged a complaint with the Australian Electoral Commission (AEC) over a fake email claiming she had withdrawn from the campaign because she has HIV.

Key points: Independent Kerryn Phelps was targeted in an email on Sunday which falsely claimed she has HIV

Independent Kerryn Phelps was targeted in an email on Sunday which falsely claimed she has HIV Dave Sharma and John Howard have firmly rejected any suggestion Liberals were behind it

Dave Sharma and John Howard have firmly rejected any suggestion Liberals were behind it Dr Phelps has reported the email to the Australian Electoral Commission, and is considering reporting it to police

Dr Phelps has reported the email to the Australian Electoral Commission, and is considering reporting it to police The Wentworth by-election on Saturday is predicted to be a close race

Dr Phelps' campaign manager Darrin Barnett told the ABC he was seeking legal advice on any potential breaches of the law and was also considering reporting the email to police later today.

AEC spokesman Phil Diak said he could confirm the commission was "making inquiries".

The email, believed to have been received by hundreds of voters in the seat, told recipients Dr Phelps had pulled out of the electoral race, and said they should vote for Liberal candidate Dave Sharma instead.

The ABC does not suggest Mr Sharma or anyone involved with his campaign was behind the email.

A spokesman for Mr Sharma initially declined to comment on the email when approached by the ABC.

But he later condemned the material and has today called for it to be investigated by the Australian Federal Police.

Speaking at a press conference with former prime minister John Howard, Mr Sharma said the email was "despicable".

When asked if he would support an investigation by the AFP and Australian Electoral Commission, he said: "Sure I'll support that. These sort [of] things are despicable and they should be confronted and combatted."

Under recent changes to the Electoral Act, communications likely to affect voting require authorisation from a registered political party, associated entity, MPs, candidates and others who have to lodge returns under the Act.

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Sorry, this video has expired Sharma backs investigation into fake Phelps email

The penalty for a breach is a fine of up to $25,200.

For a company, the fine is up to $126,000.

'Homophobic, shocking and disturbing'

Mr Sharma said he had spoken to Dr Phelps to tell her he was disgusted about the email.

"It was a vile slur," Mr Sharma said.

"It's clear it didn't come from us and didn't come from our campaign. We had nothing to do with it."

Former Prime Minister John Howard and Dave Sharma take a break while campaigning. ( ABC News: Nick Dole )

Dr Phelps, who was a prominent same-sex marriage campaigner during last year's postal survey, described the email as "homophobic" and "shocking and disturbing".

"Just when you think we've come so far with destigmatising HIV, for someone to use this in a slur in an email in a political campaign, just shows us we've got a long way to go," she said.

Wentworth returned the highest percentage of "yes" voters of all Liberal electorates during last year's postal survey.

Despite the Liberals holding the seat on a 17.7 per cent margin, Saturday's vote is far from a foregone conclusion.

If the Coalition loses the seat, it will lose its majority in the House of Representatives.

But the Coalition could still stay in control of the House and stay in government with the support of crossbenchers.

Dr Phelps has said she will back Prime Minister Scott Morrison and the Government on issues of supply and confidence.

Mr Howard hit the campaign trail at Bondi Junction with Mr Sharma today and said there was "no such thing as an unlosable seat".

"This seat may have been held by the Liberal Party since our predecessors, since Federation, but every election and every by-election is different," he said.

Mr Sharma has also been endorsed by the former prime minister and Member for Wentworth Malcolm Turnbull, who has remained in New York during the campaign for his old seat.