Labor is claiming a historic election victory in the once blue-ribbon Liberal seat of Hawthorn, sinking a star opposition MP’s hopes of leading his party from the ashes.

Former shadow attorney-general John Pesutto was considered a front runner for the leadership of the Victorian Liberal Party, but the loss of his seat would force him out of contention.

Former shadow attorney-general John Pesutto. Credit:AAP

The Victorian Election Commission finalised a series of counts in close seats on Tuesday, confirming the Liberals had lost Bayswater but held Caulfield. It is expected to finalise the count in Hawthorn on Wednesday morning.

The Liberals will decide on a new leader for the parliamentary party on Thursday with shadow treasurer Michael O’Brien tipped as the front runner.