Labor is building an election war chest to try and boot cabinet minister Kelly O'Dwyer from her blue ribbon seat in Melbourne, seizing upon swings against the Liberals in the November state election to push for what would be an historic victory.

A source within Victorian Labor told The Age and The Sydney Morning Herald that the party was putting "a lot more resources than previously planned" into the battle for Higgins, backing preselected candidate Josh Spiegel.

"A lot more is now flowing in. Fundraising is going ridiculously well," he said.

"The election is still a long way off, but let's just say we're well exceeding our targets - and donors are coming to us rather, than us having to go to them."

A Liberal source said Ms O'Dwyer was "very vulnerable" in Higgins, which has been held by the party since 1949, including by two prime ministers. She holds the seat with a 10.2 per cent margin.