LABOR is facing political oblivion, with Premier Kristina Keneally having failed to woo angry western Sydney voters in Penrith.

In a devastating result for the State Government, Liberal candidate Stuart Ayres annihilated Labor, with former mayor John Thain suffering a two-party preferred swing of more than 25 per cent.



Across the polling booths, swings of up to 35 per cent were recorded in favour of the Coalition as voters turned their back on Labor.

Labor needs to lose only six seats to hand government to the Coalition.

Despite Ms Keneally's personal popularity with voters, the backlash in the Western Sydney seat of Penrith was staggering.

If this swing were to be repeated uniformly in March, Labor would be facing a wipeout.

A repeat of the Penrith result across the State would leave only six Labor MPs in parliament. Ms Keneally's own seat of Heffron would be lost.

The defeat in Penrith, which had been held by Labor with a 9.2 per cent margin, is a huge blow to party strategists, who are counting on the popularity of the Premier in buffering voter anger in March.

At an 11pm press conference, Ms Keneally - who had led Opposition Leader Barry O'Farrell by 15 points at the last opinion poll - distanced herself from the backlash.

She refused to take responsibility for the result, putting voters' anger down to the behaviour of disgraced local member Karyn Paluzzano.

"I am disappointed, but the result was not unexpected," she said.

"I think every member in my team is heeding the lesson of tonight."

Ms Keneally said Prime Minister Kevin Rudd was not to blame for the anti-Labor sentiment in the seat.

"The people always get it right. I am indicating to the people of Penrith that I am listening to their message and humbly accept the verdict."

Jubilant Liberal Party MPs and volunteers crammed into the Penrith RSL to celebrate having won the first western Sydney seat from Labor in almost 20 years.

An emotional Mr Ayres, who at 29 becomes the youngest MP in the NSW parliament, was welcomed by deafening cheers as he entered the venue with his partner, Senator Marise Payne, and Mr O'Farrell.

"Labor does not have a lock on certain classes of people, as it constantly claims but forever continues to neglect," Mr O'Farrell said.

At the Penrith Paceway, the atmosphere at Labor's campaign party was akin to a wake as 30 devastated party members gathered for a quiet drink.

Mr Thain said he knew it was going to be a tough fight to retain the seat.

"I said it would be like climbing Mount Everest," he said.

The seat was made vacant when Ms Paluzzano resigned after having admitted misusing public funds and lying about it.

In the lead-up to yesterday's vote, ALP strategists had predicted a swing of 20 to 30 per cent to the Coalition.

Although commentators were yesterday suggesting the result would have no ramifications at a federal level, voters approached by The Sunday Telegraph appeared to be angry at both Mr Rudd and Ms Keneally.

At polling booths and on street corners, angry voters spilled forth a litany of complaints about roads, hospitals, politicians, kerbs and the Paluzzano corruption scandal.

"Frustration, more than anything else, was the mood of the electorate," Regentville Rural Fire Brigade member Graham Northey said. "It's time for a change.

"I'm an accountant and, in the course of my job, people talk politics.

"It all revolves around what's happening federally: they don't like what Rudd's doing, they don't like what Keneally's doing."

The Greens doubled their vote as disgruntled Labor voters sought out alternative candidates.

Greens MP Lee Rhiannon said the result showed the party was more than likely to win its first Lower House seat in March.

With 75 per cent of the vote counted last night, the Liberals had 66.3 per cent of the two-part preferred vote, and Labor just 33.5 per cent - a swing of 25.6 per cent.

Greens candidate Suzie Wright has received 12.6 per cent of the primary vote. At the 2007 State election, the Greens received 5.5 per cent of the vote in Penrith.

The Greens actually outpolled Labor on primary votes at several booths in the electorate.

Although the vast majority of voters said they were voting Liberal, there was strong evidence of a protest vote for the Greens.