Lismore was tracking in Labor's favour but still too-close-to-call on Sunday.
At Maroubra Beach, Mr Daley declared he was “the best person to lead the party” and pleaded for more time after only holding the leadership for 134 days.
“I want the opportunity of having four years - not four months - to go and do that groundwork and to establish myself with the people of particularly regional NSW,” Mr Daley said.
"You can't sit around and cry in your beer. You have to be brave, front up, keep working. This is an important job. Opposition is an important job. We have a very weak government here. That has promised the world."
The result followed a disastrous final week for Mr Daley, who was forced to defend himself against charges of racism after a video emerged of him saying Asian immigrants were “taking the jobs” of young Sydney workers. He also performed poorly in a live TV debate, where he was unable to explain key details of his signature education policies.
Mr Minns did not rule out challenging Mr Daley for the leadership.
“I certainly won’t rule out being a candidate for the leadership,” Mr Minns said on Sunday. “After three election losses the party has to reassess what we are offering the people of NSW.”
Under Labor Party rules, an election loss automatically triggers a leadership ballot.
However, senior Labor sources have told the Herald there is a push to delay the ballot until after the federal election, so as not to distract or divert resources from Labor’s campaign.
The ballot is expected to take around five weeks, with the party caucus and rank-and-file members each having a 50 per cent say in the outcome.
Mr Daley played down the threats to his leadership, and said he had the support of Labor's NSW head office and federal leader Bill Shorten.
“Whether there’s a challenge or not is up to other members of caucus who are, under the rules, able to stand for leader,” he said.
“I took the leadership four months ago, under difficult circumstances, and I had a very, very short time frame to establish myself and I have worked as hard as I can.”
MP Chris Minns is a likely contender of the NSW Labor leadership.Credit:Janie Barrett
Mr Daley said the result was a reality check for the major parties.
"When the entire electorate moves away from all of the major parties, and sends their votes to minor parties and independents, I think you can conclude there is a great deal of cynicism - at least at the state level - with an electorate that's disengaged," he said.
Mr Minns said his immediate focus was on being re-elected, after he suffered swings as high as 10 per cent against him in booths with a high proportion of Chinese voters.
“My seat is very close and my focus has to be on winning that,” he said.
Mr Minns challenged Mr Daley for the leadership in November, after former leader Luke Foley resigned amid sexual harassment allegations, which he vehemently denied.
He received 13 votes compared with Mr Daley's 33.
Lisa Visentin is a state political reporter at The Sydney Morning Herald.
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