"These are NOT recounts – also happens [in] all seats at federal elections by law," the commission said in a tweet. With 16 candidates on the ballot papers, some observers suspect some of the initial counting could have made mistakes with allocating preferences and that this may only be resolved in a recount in the weeks ahead. Dr Phelps remains the favourite but her lead could be narrowed given the trends in the postal votes being counted on Sunday morning. Loading Replay Replay video Play video Play video Prime Minister Scott Morrison acknowledged the dramatic swing against the Liberal Party on Saturday night and phoned Dr Phelps on Sunday morning to congratulate her on her campaign, but he said the counting was yet to conclude.

"If it gets as close as 100 then an automatic recount is triggered under the normal rules," Mr Morrison said. The tally at 10.30am on Sunday showed Mr Sharma had 36,067 votes on a two-party basis while Dr Phelps had 36,951, a difference of 884. Loading The Liberals were gaining about 64 per cent of the postal votes already counted on a two-party basis, with another 1266 postal vote envelopes received and still to be processed. Assuming the Liberals gain 810 of those remaining postal votes and Dr Phelps secures 456 of them, the gap would narrow but the independent candidate would still win.

In this scenario, Mr Sharma would have 36,877 votes and Dr Phelps would have 37,407 votes and would win the seat. The gap between them would be 530 votes and the Liberals may consider calling for a recount, although they would have to bear the cost of doing so. Another question mark hangs over the outcome because an unknown number of postal votes are yet to be returned to the Australian Electoral Commission. The AEC issued 12,788 postal vote envelopes. As at 10.30am on Sunday, it had received 6,890 and had processed 5,624. Independent candidate Kerryn Phelps and the Liberal Party's Dave Sharma. Credit:Fairfax Media This means there are 5602 postal vote envelopes that were issued but have not been returned and may yet be counted by the deadline of November 2. Given the experience at previous elections, a conservative assumption is that only 70 per cent will be returned.

If another 4000 postal votes are returned and the same preference flows apply, with 64 per cent going to Mr Sharma on a two-party basis, the Liberal candidate could edge ahead. Mr Sharma would gain another 2560 votes and Dr Phelps would gain another 1440. In this scenario, Mr Sharma would have 39,437 votes and Dr Phelps would have 38,847 votes. Assuming these developments, Mr Sharma would win the seat by 590 votes. ABC election analyst Antony Green said on Sunday morning the Wentworth count showed the biggest "turnaround" he had seen in postal votes. Loading Replay Replay video Play video Play video

Mr Green called the byelection result for Dr Phelps at around 7:15pm on Saturday night. "She's in the lead, more likely to win, but the gap is likely to narrow further," Mr Green said on ABC TV on Sunday morning. Mr Morrison said on Sunday morning that the verdict was a message to federal Liberal MPs about the removal of Malcolm Turnbull as prime minister on August 24. "Yesterday, Liberal voters expressed their anger at the parliamentary Liberal Party – there's no doubt about that," he said. "And we cop that fairly on the chin. The events of two months angered and outraged many Liberals, and particularly those in the seat of Wentworth.