The Liberals have claimed victory in a key Victorian byelection seen as a preview of what to expect when at the upcoming state election in November.

As counting continued in the Mornington Peninsula seat of Nepean, Liberal candidate Anthony Marsh appeared to be in a commanding position in a significant boost to Opposition Leader Jess Wilson.

With close to 80 per cent of the vote counted, Marsh had 38.5 per cent of the primary vote, and 63.4 per cent on a two-candidate basis.

However, the Victorian Electoral Commission was initially running the two-candidate vote as a race between the Liberals and independent Tracee Hutchison.

Hutchison was in second place early in the count, but later slipped behind One Nation’s Darren Hercus.

Hercus had 24.7 per cent of the primary vote to Hutchinson’s 21.3 per cent.

Liberal candidate for Nepean Anthony Marsh doesn’t live within the electorate he will represent. Photo: AAP

In a speech to supporters, Marsh said he was “so glad I could bring it home for you tonight”.

“This is the honour of my life to be standing here as the next member for Nepean,” he said.

“I’ll be on the ground each and every single day fighting for the people of Nepean as we lead into one of the most important state elections that we’ve seen.”

While welcoming the result, Wilson said Liberals still had more work to do ahead of the November poll.

Labor did not field a candidate on Saturday, and while the Liberals retained Nepean, they suffered close to a 10 per cent swing against them on the primary vote.

The seat has been Liberal-held since its inception, with the exception of one four-year period.

Saturday’s byelection was triggered by the sudden resignation of Victorian Liberal deputy leader Sam Groth.

One Nation candidate Darren Hercus looks set to finish second on the primary vote. Photo: AAP

Marsh was forced to admit he didn’t live in the electorate so couldn’t vote for himself on Saturday. But said he had been mayor in the area three times over the past five years.

Hercus said it was a tight race with a mixed response from voters fed up with empty promises.

“We’ve had a few Liberal voters come over to us for frustrations they’ve been feeling with their own party,” he said.

One Nation leader Pauline Hanson campaigned alongside Hercus but was absent on polling day.

“People will vote for her rather than me,” Hercus said.

Ahead of the count, Hutchison said many voters were looking for an alternative as the area had been overlooked and let down by the major parties for decades.

“I am putting myself forward as someone who is of this place, who cares deeply about this place,” she said.

Independent candidate Tracee Hutchison. Photo: AAP

Monash University senior politics lecturer Benjamin Moffitt said the strong One Nation showing backed up national polling and the South Australian election result, and could bode poorly for the Liberals in the Victorian state election.

“If they even do somewhat well in Nepean, that’s a real problem for the Liberal Party,” Moffitt said.

The electorate takes in the wealthy postcodes of Sorrento, Portsea and Flinders, and low socio-economic areas such as Capel Sound, formerly known as Rosebud West.

The Mornington Peninsula is officially part of metropolitan Melbourne, but does not have comparable services. Public transport and a planned revamp of Rosebud Hospital were among key issues for locals.

—AAP