Labour sources have said they are “cautiously optimistic” of returning to power in Corby.
Turnout in the Northamptonshire town is predicted to be more than 40 per cent but the result will not be known until this afternoon.
It is regarded as the first major by-election test for Prime Minister David Cameron, with the Conservatives defending a slim majority of less than 2,000.
The source said: “We are cautiously optimistic about Corby.
“Turnout is looking as if it will be over 40 per cent with at least 250 Labour activists on the ground.”
Labour has established a solid poll lead in Corby since the last election and the Tories’ efforts were plunged into controversy on Tuesday night when it emerged their campaign manager Chris Heaton-Harris had encouraged a rival candidate.
The by-election was caused by the resignation of Louise Mensch who moved to New York to be with her family.
Mrs Mensch said she would accept responsibility if the Tories lost the seat
Talking on Twitter, she said: “Election result will not be a verdict on either Christine, or the Conservatives, but only on the decision I took to step down mid-term.
“Though I had to resign to unite our family, there was large & entirely understandable local anger. I wish I had been able to see out my term.”
The Tory candidate Christine Emmett is expected to lose out to Labour’s Andy Sawford, who will need to overcome a Conservative majority of 1,951 votes.