The Labor Party is not ruling out a legal challenge to the result in the marginal Federal South Australian seat of Boothby, after another turn in the count.

The Australian Electoral Commission (AEC) has accepted legal advice to exclude 2,977 votes from the count.

The decision has reduced the lead of the sitting Liberal Andrew Southcott by 339 votes, but he has claimed victory with a current lead of 1,394 votes more than ALP candidate Annabel Digance.

The excluded votes were cast at an early voting centre at suburban Oaklands Park.

They were later deemed to have been handled in a way which contravened provisions of the Commonwealth Electoral Act when they were removed from a box and placed into another by an AEC employee.

The Labor Party's South Australian secretary, Michael Brown, says he is reserving his rights on whether to take the result in Boothby to a Court of Disputed Returns.

"The AEC through its action today has confirmed that it doesn't have absolute confidence that these are the same votes that were cast," Mr Brown said.

The AEC's Chris Drury says cancelling the votes is the result of a technical error and it is being investigated.

"So what we're talking about there is a procedural error not a conspiracy," Mr Drury said.

"The key message here I think is that there's no hold-up in the Boothby count involved and the AEC will now complete counting of all the Boothby votes and will be declaring the winning candidate elected as soon as possible.

"After the close of business on Friday, which is the final date for postal votes to be received by us and counted, very soon after that we'll be finalising the vote."

Mr Brown says the party will decide whether to pursue the matter once the AEC investigation is finished.

"We do not have any confidence now that the 3,000 votes counted were actually the 3,000 votes that were cast," he said.

"The AEC has agreed with us that those votes cannot be included, so it's now the case that we do not know at this stage and may never know who actually was elected."