The state government prevailed on the unmarked preferences of minor party voters after a nail-biting contest for the blue-ribbon Liberal seat of North Shore and was expected to survive an even larger voter backlash in Manly.

Labor comfortably retained and extended its lead on the Central Coast.

"Our scrutineers tell us we can reclaim the seat of North Shore," Premier Gladys Berejiklian told a small band of supporters in Cammeray on Saturday night.

"I always said North Shore would come down to the wire.

"[Voters] put their faith in me, they put their faith in [candidate Felicity Wilson] and we won't let them down."

With more than half the votes counted, the swing against the Liberal Party on first preferences reached more than 17 per cent in North Shore.

But the collusion of independent and minor party candidates to preference the Liberal Party last had less impact than predicted.

The Liberals' first preference totals remained at nearly 43 per cent in Manly and 42 per cent in North Shore despite the swings.

Marking preferences is optional in NSW elections and the rate at which minor party voters marked, or did not mark, second and third preferences gave the Liberals confidence to declare victory.

The Premier had claimed victory in Manly earlier on Saturday. In former premier Mike Baird's seat Liberal candidate James Griffin was projected to win despite being down on first preference votes and the findings of a liquidator a company he ran may have traded while insolvent.

"Let me assure the men and women of [Manly] you will have in James an outstanding local member," Ms Berejiklian said.

Liberals chalked up the major denting of their vote in party heartland to scandals involving their candidates and anger at council amalgamation among the party's most loyal voters, especially in Mosman, the suburb which was home to the first ever branch of the Liberal Party, set up by Robert Menzies.

Locals in North Shore and in Manly have been vocal in their opposition to the state government's plan to forcibly merge the council with its neighbours, which had resulted in legal action against the state government by Mosman, Lane Cove and North Sydney Councils.

Ms Berejiklian cancelled planned mergers of several rural councils that had brought action against the government soon after taking power and negotiating with a new leader of her Coalition partner the Nationals. But she declined to do the same for councils in urban areas, potentially inviting political backlash.

Volunteers from the Save Our Councils coalition flooded polling booths in North Shore and Manly from all around NSW.

"I'm going to be a strong local voice," said government relations and media adviser Felicity Wilson, who prevailed despite revelations she had signed an incorrect statutory declaration that told party preselectors she had lived in the electorate for 10 years.

The average loss of first preferences by a sitting government in NSW byelections since 1988 is about 9 per cent, with the National Party's thrashing in the seat of Orange last year setting the high benchmark at 34 per cent.

Labor, which is not contesting either seat in Sydney's north, was set to retain and extend its lead in a third seat, Gosford on the NSW Central Coast.

The ALP candidate, Liesl Tesch, a Paralympian wheelchair basketball gold medallist, attracted a swing of about 10 per cent on first preferences.

Labor MP Kathy Smith claimed the seat back from the Liberals by about 200 votes last election. She has retired from Parliament following a cancer diagnosis.

Two Liberal veterans, Mr Baird and former health minister Jillian Skinner, represented Manly and North Shore and caused byelections following their retirement from politics.