John Pesutto has denied his leadership of the Victorian Liberals could come under threat after the party was forced to settle for by-election bronze.
The Victorian Electoral Commission has confirmed independent Ian Cook finished second in the Mulgrave by-election after the distribution of preferences, edging out Liberal hopeful Courtney Mann.
Labor candidate and ex-mayor Eden Foster won the November 18 poll, triggered by the retirement of former premier Daniel Andrews in September, after securing 56.5 per cent of the two-party-preferred vote.
The Liberals appeared on track to claim second on election night, with Mr Pesutto and other shadow frontbenchers hailing a swing against Labor.
Mr Pesutto defended the decision to run a candidate following the updated result, pointing to the Mr Cook's prominence to justify finishing third.
"We did come second on primaries and I think that's an important point to make," he told reporters on Tuesday.
"The two-party-preferred went Ian Cook's way but only just ... about 150-something votes."
Mr Cook, of shut-down Melbourne caterer I Cook Foods, recontested the seat as an independent after collecting the second most first preference votes at the 2022 state election.
The Supreme Court this month ruled former chief health officer Brett Sutton's order to shut down his business over the listeria-linked death of an 86-year-old woman was invalid because the health department did not observe procedural fairness.
But the judge dismissed the company's bid for damages.
Mr Pesutto was categorical that the third-place finish would not put his leadership at risk.
Victorian government minister Danny Pearson branded the Liberals' decision to contest Mulgrave an "epic fail".
"(Federal Nationals MP) Darren Chester described the Liberal Party as an election-losing machine," he said.
"He was working on the basis that the Liberal Party would regularly finish second. Well, under John Pesutto's leadership they're finishing third."
The poll marked the second Victorian state by-election this year after the Liberals retained the seat of Warrandyte in Melbourne's northeast following the retirement of veteran MP Ryan Smith.
Labor did not contest the Warrandyte poll.
