The Liberal Party looks set to retain the state's most marginal seat, East Hills.
While the south-western Sydney electorate was predicted to be the first beneficiary of a correctional swing, sitting MP Glenn Brookes was enjoying a 0.8 swing with nearly 65 per cent of the vote counted on Saturday night.
Labor's candidate, Cameron Murphy, said he had not given up hope of winning and thought a clear result would not be available for a few days. He said two large booths, pre-polls and postal votes could narrow the swing.
"I think it is difficult from the results we have in tonight but I am holding out hope that is the case," he told supporters at his election gathering in Revesby.
Fairfax Media revealed on Saturday that senior NSW labor sources thought Mr Murphy would lose the seat after a smear campaign alleged he was a supporter of paedophiles.
Mr Murphy, a former president of the NSW Council for Civil Liberties, earlier in the evening said it was "difficult to judge" the impact the malicious campaign would have on voters.
"I'm just very disappointed. It's disappointing that people would engage in this sort of activity. It's just gutter level, dreadful and it doesn't deserve to be rewarded," Mr Murphy, the son of former high court judge and former Labor federal attorney Lionel Murphy, said.
"I just don't know the impact it will have. I was on polling booths today and I got a very good response. It would be a very sad day in Australian politics if this sort of campaigning was rewarded."
Mr Brookes is the first Liberal to hold the seat since the south-western Sydney electorate was formed in 1953.
He beat Labor's Alan Ashton in the 2011 election by fewer than 500 votes on a two-party-preferred basis.
The former local councillor and business director went into the election with a tiny margin of 0.2 per cent.
Late on Saturday, he described himself as more "tired" than optimistic and said he would not declare victory until more votes had been counted.
Voters at the polling booths on Saturday raised TAFE funding, unemployment and the privatisation of electricity as the area's key concerns.
