Former Coalition frontbencher Sophie Mirabella has conceded defeat in the Victorian seat of Indi, with independent challenger Cathy McGowan set to take her place in Federal Parliament.
As new ministers arrived at Government House to be sworn in to Tony Abbott's first ministry, Mrs Mirabella issued a statement saying she had contacted Ms McGowan to congratulate her on her win in Indi and to concede defeat.
Mrs Mirabella, who was likely to be a second female member of Mr Abbott's 19-member cabinet if she had not been defeated, said she would not be seeking a recount.
The closely fought seat has been keenly watched in the past week and a half. Ms McGowan, who pulled off the unusual outcome of defeating a major party member as an independent, had a lead of 389 votes over Mrs Mirabella following the distribution of preferences on Wednesday morning.
Mrs Mirabella said representing the people of Indi since 2001 had been ''a high honour and a very special privilege''.
''I want to thank the electors of Indi for their support over the last decade. They have enriched my life and that of my family and, together, we have achieved so much for our community,'' she said.
''I also thank those who voted for the Liberal Party in this election and in the previous four elections in Indi. This election is over and the responsibility for the outcome is mine.''
Mrs Mirabella said the count was close but she was not seeking
a recount because she accepted ''the decision of the democratic process''.
Ms McGowan said she was overwhelmed by the news and thanked the Indi community. ''What an amazing thing. It's community.''
Speaking from the Chiltern bakery, she also thanked those from Sydney and Melbourne who had contributed funds to her grassroots campaign. ''I always hoped for this but I am so pleased.''
She said Mrs Mirabella phoned her at about 10.30am and conceded defeat.
''It was charming, professional is probably the word. She wished me well, congratulated me, and I said thank you. I wished her well and hope things go well for her - I really do,'' Ms McGowan said.
She said celebrating would be the first thing she would do as the new MP for Indi.
''The first thing we will seriously do is have a party. We have booked out the Oxley Hall for a party. There will be a traditional country dance and we will come together as a community.''
Ms McGowan said she could not have achieved the result without more than 600 volunteers working tirelessly behind the scenes.
Ms McGowan received a rock star welcome outside her Wangaratta office. Volunteers shouted with joy, clapped, cried and hugged the MP. ''She's off to Canberra,'' one woman said.
Ms McGowan said the last week and a half of uncertainty had been a rollercoaster of emotions.
''The primary emotion has been pride,'' she said.
''As we have been waiting for the result to come out, we have felt great pride in what we have done.''
Ms McGowan acknowledged Mrs Mirabella's contribution to public service and the 12 years of work she had done for the electorate.
Employers' organisation the Australian Industry Group paid tribute to Mrs Mirabella, saying that in her role as shadow minister for innovation, industry, science and research she had showed ''consistent and strong engagement with industry''.