Australia government suffers Wentworth by-election defeat

Australia's governing coalition has lost its one-seat parliamentary majority after a by-election in Sydney.

Kerryn Phelps, a local doctor and popular independent candidate, comfortably won the Wentworth seat.

"This win tonight should signal a return of decency, integrity and humanity to the Australian government," she told supporters.

Australia has had six prime ministers in eight years, and now faces further uncertainty.

Prime Minister Scott Morrison's ruling Liberal Party had been fighting to hold Wentworth, which was vacated by his predecessor, Malcolm Turnbull.

The result means the centre-right party will need to rely on independent MPs to survive confidence votes. Two have already vowed not to back Mr Morrison.

Speaking at the HQ of Liberal candidate Dave Sharma, Mr Morrison said it had been a "tough day" and the result was "not unexpected".

"Liberals are angry and they've expressed that," he said.

"We will work constructively with all of those on the crossbench, as we always have... The Liberal-National government will be back at work on Monday."

Analysis by Phil Mercer, BBC News, Sydney

Revenge. The people of Wentworth have sent a blunt message to Australia's political class that back-stabbing and party dysfunction won't be tolerated.

The defeat of Dave Sharma, the governing Liberal candidate in the Sydney by-election, is an act of retribution by voters furious and frustrated at the ruthless ousting as prime minister of their beloved former MP, Malcolm Turnbull. Scott Morrison has failed his first electoral test as PM and more trouble is brewing.

The lightning and thunder that jolted Bondi Beach and other parts of Wentworth as the polls closed are a sign of a wild political ride that lies ahead. The Morrison government has lost its narrow parliamentary majority, but it should survive, for now at least, with the support of independent MPs.

However, with an election due next May its longer-term prospects appear increasingly grim.

Controversy was stoked during the by-election race by the prime minister's proposal that Australia could follow the US and move its embassy to Jerusalem.

Mr Sharma is the former Australian ambassador to Israel and first proposed such a move.

Around 13% of Wentworth's voters are Jewish, compared to less than 0.5% of the Australian population as a whole.

Kerryn Phelps has said any decision on recognising Jerusalem as Israel's capital must take into account trade, security and defence considerations.