Labor’s by-election catastrophe in Sydney at the weekend marked an historic low in the electoral performance of the ALP in NSW and anywhere else for that matter.

The headlines said it all: “By-election bloodbath — Angry voters smash Labor” (Sunday Telegraph) and “We’re finished, says Labor — State ALP faces electoral wipeout” (The Sydney Morning Herald).

Before the ALP coffin is rolled into the furnaces, however, there is a tiny sliver of hope for Premier Nathan Rees — the NSW division of the Liberal Party.

Let’s travel north from Sydney to the mid-north coast where the fourth by-election was held at Port Macquarie.

The seat was won by Independent Peter Besseling, a staffer for the former State MP Rob Oakeshott who last month was elected federal MP for Lyne, Mark Vaile’s old seat.

Oakeshott was originally elected as a National in Port Macquarie in 1999 but walked out of the party in March 2002 to declare himself an Independent. While representing the good people of “Port” in his new guise, Oakeshott has acquired a wife and young family, a law degree and watched the sacking of the local Port Macquarie and Hastings Council followed by the appointment of a Labor-friendly administrator, Dick Persson.

The Nationals spent almost $100,000 in last Saturday’s by-election trying to secure the election of its candidate Leslie Williams, a widely-admired community activist.

Labor did not offer a candidate because it was happy to see it retained by the Independents. The Liberal did not stand because that would have ignited a war with the Nats and a split in the Coalition.

But then, out the woodwork, came a group of Liberals who threw their support behind the Independent. Alby Shultz, Liberal MP for Hume, drove up from Cootamundra to pull on Besseling T-Shirts and hand out Besseling campaign leaflets, and two far right Nats haters, Senators Bill Heffernan and Concetta Fierravanti-Wells, began attacking the State executive decision not to stand.

And on the eve of voting, Port Macquarie Liberal Party branch president Ken Dodds, a developer, gave the Independents an extraordinary boost with a signed, open letter which found its way straight to the media.

He attacked his own party for refusing to stand a candidate and party leader Barry O’Farrell for visiting the electorate to support Leslie Williams. He wrote:  “Mr O’Farrell’s visit only further confirms my personal view that Mr Peter Besseling is the right candidate to represent the people of Port Macquarie.”

At a stroke, Besseling was given endorsement by the most senior local Liberal. He unofficially became the Liberal Independent candidate and took the seat despite a 22 per cent cut in the vote achieved by his predecessor.

NSW Nationals Leader Andrew Stoner is now blaming the Liberals for the failure to capture Port Macquarie while the Liberal far right is saying: “We told you so — the Nats haven’t won Port Macquarie, we should have stood our own candidate.”

While O’Farrell conducted a focused and energetic campaign in the three Sydney seats of Ryde, Cabramatta and Lakemba and won record-breaking swings, his party — thanks to three Federal MPs, Schultz, Fierravanti-Wells and Heffernan, and Dodds (who is registered to vote in Sydney!) — was a rabble in Port Macquarie.

Are the Liberals poised to snatch defeat from the jaws of victory as they’ve done so often in the past, or will O’Farrell exert his leadership to discipline the wreckers who have the potential to poop his premiership party in two and a half years’ time?