UPDATE 8.25am: With 86 percent of the votes counted, Nick Vavaris is ahead by 643 votes (after preferences)
UPDATE 4.47pm: Nick Varvaris is ahead by 27 votes.
UPDATE: Wednesday September 11:
Liberal candidate Nick Varvaris has hit the lead for the first time as vote-counting continues in the seat of Barton.
This morning, he was 14 votes in front of his Labor opponent Steve McMahon.
Officials, watched by party scrutineers, have so far been recounting votes that have been counted previously.
More than 12,000 postal and absentee votes are still to be counted.
The result may not be known until next week.
UPDATE: 4.32pm
The counting of about 5300 postal votes in the seat of Barton, which was expected to start this afternoon, has been put off until tomorrow.
Following recounts in various booths, Labor has a lead of 53 votes.
UPDATE 2.50pm:
Liberal candidate Nick Varvaris continues to close the gap in the seat of Barton.
He trails Labor candidate Steve McMahon by 43 votes following further recounting this morning.
About 12,000 postal and absentee votes still need to be counted.
It is expected the counting of postal votes will start this afternoon.
Absentee votes are due to be counted on Thursday and Friday.
Who do you think will win?
Tuesday morning:
A RECOUNT of votes in the seat of Barton yesterday gave Labor candidate Steve McMahon a lead of 68 votes.
The outcome will now depend on more than 12,000 postal and absentee votes, a higher number than had earlier been predicted by some campaign officials.
Postal votes are expected to favour Liberals while the absentee votes could give Labor a boost.
Returning officer for Barton, Gloria Burgess, said they hoped to start counting about 5000 postal this afternoon (Tuesday) or tomorrow morning.
Counting of more than 7000 absentee votes was likely to take place on Thursday and Friday.
Ms Burgess said checks had to be done on these votes before they were counted to ensure there were no duplications.
The atmosphere was tense as the votes were tallied and checked by scrutineers from each party, in an Australian Electoral Commission office in King Street, Rockdale.
"[The two candidates] are very passionate for their parties," Ms Burgess said.
Scrutineers included former premier Morris Iemma and former NSW Labor Party boss Sam Dastyari, who is about to enter the Senate.
Senator Connie Fierravanti-Wells was among Liberal Party representatives.
Labor candidate Steve McMahon said independent Michael Nagi, who preferenced the Liberals, made for the close result.
"Given that he directed preferences to the Liberals and his track record of supporting them on Rockdale Council it was clearly a plan to draw votes away from Labor," Mr McMahon said.
"I am told that when Tony Abbott visited Arncliffe on election day, he thanked Nagi."
Mr Nagi said he set out to make Barton marginal, and "my dream has come true".
"The community is the winner," he said.
Numerous attempts by the Leader over the weekend and yesterday to contact Mr Varvaris for comment were unsuccessful.
MCMAHON’S PHOTO FINISH
This is Mr McMahon’s second election “nail-biter” in two-and-a-half years.
He was campaign manager for Kevin Greene, who lost the State seat of Oatley in 2011 by 440 votes after six nerve wracking days of counting.
Mr McMahon said it was different this time because candidates were not allowed to watch the vote counting.
‘‘I just have to wait,’’ he said.
‘‘If I win, I win. If I lose, I win — because I still have a job and a lovely family’’.
Who would you like to see win Barton?