Federal Labor MP Belinda Neal has thanked her supporters after she was dumped for preselection by her party yesterday.

The controversial politician's career was dealt a fatal blow when she lost the preselection battle for the New South Wales seat of Robertson to Deborah O'Neill, a university academic.

Ms Neal has issued a statement in which she thanks her supporters and pledges to keep working for residents of the central coast and do her best to resolve their problems.

Deborah O'Neill says she will now turn her attention to campaigning for the next federal election.

"I think it is time for us to move forward and to really focus on on the priorities for this seat," she said.

Earlier Ms O'Neill said she was the party's best shot of keeping hold of the marginal seat at the next election.

"People in this area want to vote Labor," she said.

"People should choose me because my relationships with them have always been very transparent and ones of integrity."

Labor holds Robertson by a margin of just 0.1 per cent.

Scandal-hit

Ms Neal has been embroiled in a number of scandals since taking office in 2007, including the now infamous trip to the Iguanas nightclub.

Prime Minister Kevin Rudd instructed her to take anger-management classes after she and her husband, John Della Bosca, were accused of abusing staff at the restaurant.

There were also allegations of impropriety in this preselection battle, though Ms Neal has denied the claims.

Earlier yesterday, Ms Neal was confident of winning the vote.

"I'm not taking anything for granted," she said.

"I'm working as hard as I can, but I'm quite confident that at the next election I will be representing the ALP in the seat of Robertson."

Deputy Prime Minister Julia Gillard has told Channel Ten that Ms Neal was a good local member and the decision to dump her as the Labor candidate was made by local party members.

"This was a rank-and-file preselection and they've made their decision," she said.

"I believe Belinda was a good member for her area, but now the rank and file have spoken and it's Deborah O'Neill who will be Labor's candidate at the next election."

In a neighbouring electorate, the Labor MP Craig Thomson won a separate preselection contest for the federal seat of Dobell.