Federal MP Bob Katter suffered a 16 point swing against him in Queensland's seat of Kennedy because voters believed he supported Labor, local mayors say.
It was almost enough to unseat the outspoken MP, whose 18 per cent buffer in the north Queensland electorate should have meant he would have no trouble being re-elected.
Rosa Lee Long, mayor of the Tablelands Regional Council which governs an area inland from Cairns, said the results have shocked many.
"A lot of people are surprised it's been reduced by that amount, although they thought it would go down," she told AAP.
Ms Long says the Liberal National Party's (LNP) ad campaign that a vote for Katter's Australian Party was a vote for Labor had been instrumental in reducing Mr Katter's margin.
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"But that's kind of worked for him and against him," said Ms Long, a former Queensland state MP for One Nation.
"It could be the Labor preferences that will actually keep him in power."
As votes were still being counted on Monday afternoon it looked likely Mr Katter would retain his seat with 52.5 per cent compared to LNP candidate Noeline Ikin's 47.5 after preferences.
Mr Katter, who has held the seat since 1993, scored just 30 per cent of the primary vote compared to Ms Ikin's 41 per cent.
Richmond Shire Mayor John Wharton said voters believed Mr Katter preferenced Labor, whether he did or not.
"People in northern Australia feel they have been persecuted by Labor," he said.
Mount Isa Mayor Tony McGrady, a former state Labor MP, said some residents felt Mr Katter was too focused on national issues and not on the electorate.
Mr Katter has blamed the way his party performed on the coalition's campaign against him and has previously said the accusations weren't true.
He also it was hard to compete with billionaire Clive Palmer's fledgling party.
Mr Katter couldn't be contacted on Monday.
