Federal MP Clive Palmer says his party didn't know their candidate for the key undecided Brisbane seat of Ferny Grove was bankrupt.
Queensland's Electoral Commission has confirmed Palmer United Party candidate Mark Taverner had signed a declaration that he was eligible to stand for election.
However, it has since been discovered that Mr Taverner is an undischarged bankrupt which makes him ineligible from standing for parliament.
Ferny Grove could be heading for a by-election as the Liberal National Party is likely to dispute the result if the Labor candidate, Mark Furner, who is leading by 509 votes, wins as expected.
The ECQ had gained crown law advice on Wednesday to continue the count, which sees Mr Taverner with 836 votes.
A by-election could ultimately decide government as Labor are now projected to hold 44 seats and the LNP 42, with two to Katter's Australian Party and one to Independent Peter Wellington.
Mr Palmer described the situation as "unfortunate" and said he and the party had been duped.
"He signed a declaration with our party saying he wasn't an undischarged bankrupt and we took that on face value," he told ABC Radio.
Mr Palmer said he's revelling in Premier Campbell Newman's defeat in the seat of Ashgrove.
"He'll find it difficult to get a job because no one will employ him," he said. "I can't think of what he'll do.
"He'll have a business card soon which'll say `consultant'. A consultant in his context is another word for unemployed."
Mr Palmer also said he was not lobbying any party to shore up support for his financial interests in the coal mining Galilee Basin in the state's southwest.
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