The win is an endorsement of voters faith in Mr Baird, which outweighed scepticism of his signature policy of electricity privatisation amid a ferocious scare campaign. Labor was always expected to regain a swag of seats from the government, in a natural correction of Labor's worst ever result in 2011.

But the shock of the night was the strong performance of the Greens, which had declared wins in the inner city seats of Newtown and Balmain, and were ahead in the once safe Nationals seats of Ballina and Lismore, but were still awaiting the count of pre-poll votes.

Mr Baird declared the people of NSW had given his government a mandate, and had "chosen hope over fear". Opposition Leader Luke Foley had proved a tough opponent, he said. 

"We decided to be open with the people of NSW. We exposed ourselves to a big scare campaign, I believe the biggest scare campaign in NSW history," Mr Baird said.

He pledged his government would "do what we say we are going to do" and would "work every day for you to make your lives better".

Mr Foley, who won the lower house seat of Auburn for the first time, described Mr Baird as an "honourable opponent", and said the campaign was "never personal".

"When his government had entered very stormy waters he steered the ship back to safety," Mr Foley said of Mr Baird.

Voters had declared that it was too soon to return Labor to government, Mr Foley said. "I understand their decision and accept it."

But he noted most Labor seats would now be held by new MPs, and he was delighted that nine or 10 new women would enter the lower house for Labor.

"With this result tonight we have gone from a rump in the State Parliament to a real opposition," he said.

Mr Baird acknowledged swings toward the government to secure the marginal seats of Oatley, East Hills and Mulgoa, and returned Miranda to the Liberals after an historic by-election loss in 2013.

The Nationals suffered strong swings on the North Coast on the back of community anxiety over coal seam gas. Greens upper house MP John Kaye said: "It is an enormously strong vote for Greens policy and huge endorsement of a party that puts the community and environment ahead of vested interests."

Greens candidate Jenny Leong last night pledged to work in Parliament to "stop this dirty West Connex tollway". 

The potential for the Greens to lift their upper house vote, and gain a third seat on Saturday night, or six overall, would pose a headache for the Baird government, which must pass its signature electricity privatisation through the Legislative Council. The Shooters and Fishers Party, Labor and the Greens oppose the policy, and the Coalition was hoping to win an extra seat in the upper house and work with Reverend Fred Nile, who the Liberals had preferenced.

Labor was celebrating the win of Port Stephens on the central coast by Kate Washington, which had been held by the Liberals on a 14.7 per cent margin, as well as the return of Campbelltown in western Sydney.

"Port Stephens is one of the standouts of the night. This election was always about rebuilding NSW and getting great new talent into Parliament. Jo Haylen, Chris Minns and Kate Washington are exactly what NSW Labor needs," said NSW Labor general secretary Jamie Clements. Labor expected to win 31 to 34 seats, a gain of up to 14.

The Liberals were pleased to regain Holsworthy, after a boundary change pushed the southern Liberal seat further west.

The Liberals had always expected to be punished in the Hunter and Central Coast, which had historically voted Labor, after the political donations corruption scandal saw a spate of new Liberal MPs resign. Maitland, Wyong and Swansea appeared to have been won by Labor, while The Entrance was close.

Planning Minister Pru Goward survived a double digit swing against her in Goulburn, while John Barilaro was expected to hold the seat of Monaro despite the Nationals 2 per cent margin there.

The western Sydney Liberal seat of Strathfield was expected to be tight.

Labor federal senator Sam Dastyari lashed out at the "deplorable behaviour" of Labor figure Martin Ferguson during the campaign. Mr Ferguson was among a list of Labor figures who had criticised the anti-privatisation campaign run by Mr Foley and the unions.

Mr Dastyari said Labor's unexpected win in Campbelltown would be a "big lesson for the party", as the candidate was chosen through a community preselection.

Greens campaign committee member Ben Spiers-Butcher said the Greens party members on the ground in the North Coast seats were known by the anti-CSG protest movement, which had assisted the campaign.

smh.com.au