Senior NSW Liberals say it will take a "miracle" to win the Wentworth byelection, labelling a damaging email smearing independent Dr Kerryn Phelps as "the final nail" in the campaign.

Sources close to the campaign said the email that falsely claimed Dr Phelps had HIV and was pulling out of the race was "hugely damaging", and had cruelled their chances of holding the seat.

Liberal candidate Dave Sharma called the email "vile" and supported Dr Phelps' demands for its origin to be investigated by the Australian Electoral Commission.

But party sources said the email, alongside the leak of the Ruddock report into religious freedom, would have the desired effect of causing "maximum damage" to the Liberals and portraying the party as "homophobes".