The landslide victory for Mr Oakeshott, who was a state independent MP before running for federal parliament, is a major blow for the Nationals.

The seat of Lyne, on the NSW Mid North Coast, was previously held by a comfortable margin by former Nationals Leader and Deputy Prime Minister Mark Vaile.

However, his retirement prompted the by-election, and opened the window for the popular Mr Oakeshott to shift into Federal politics.

It leaves the Nationals with just nine members in the House of Representatives, and again raises questions about the party's long-term viability.

Mr Oakeshott becomes one of three independents on the cross benches - with Tony Windsor and Bob Katter - all of whom were once members of the Nationals.

Mr Oakeshott won the seat in a landslide with more than 64pc of the vote.

Meanwhile, in SA Liberal candidate Jamie Briggs has won the seat of Mayo, previously held by former Foreign Minister Alexander Downer.

With 70pc of the vote counted Mr Briggs had 51.53pc of the two-party preferred vote, ahead of Greens candidate Lynton Vonow who had 48.47pc. Labor did not stand a candidate.