By 8.55pm on Saturday, Opposition Leader Matthew Guy had phoned Mr Andrews to concede defeat and congratulate the re-elected Premier on his victory.

At the time of that call, Labor was set for victory in 60 electorates in the 88-seat lower house, a gain of 14 seats.

In the cabaret room of Mulgrave's Village Green Hotel packed with elated Labor volunteers and staff members, Daniel Andrews said voters had given the government’s ambitious infrastructure agenda a massive endorsement.

“They have in record numbers at the same time rejected the low road of fear and division,” he said. “And for that, I am very, very proud.”

The room erupted in booming cheers and applause as Mr Andrews declared his government the most progressive in Australia.

“We are the most progressive state in the nation,” he said.

Giving his concession speech just before at the Veneto Club in Bulleen, Mr Guy could not disguise his awe at the scale of Labor’s win and the superiority of its campaign.

“I rang the Premier Daniel Andrews and offered my sincere and gracious congratulations to him on what has been a stunning night for him and his party,” he said.

“It is fair and the right thing for us to do to acknowledge his success, his party and his team’s success and the strength of their campaign and tonight I do that.”

As counting continued into Saturday night, Labor also looked like it had inflicted serious reverses on the Greens in the inner-city battleground seats bitterly contested between the two parties, with the minor party tipped to hold just two of its three seats.

Liberal frontbenchers David Southwick and the veteran Robert Clark appeared to be among the casualties, possibly losing their seats of Caulfield and Box Hill respectively. Shadow attorney-general John Pesutto was locked in a desperate battle to save his seat of Hawthorn.

The political bloodletting went on right across traditional conservative strongholds in Melbourne’s leafy eastern suburbs with Forest Hill, Burwood and Mount Waverley also swept away on the red wave.

Labor’s Planning Minister Richard Wynne looked to have survived the strong challenge from the Greens in his seat of Richmond and the Greens seats of Prahran and Melbourne remained in the balance late on Saturday.

The Greens were in danger of losing two of their three seats, as counting continued.

Labor’s after-party in Mulgrave erupted in jubilant cheers each time it looked like the government had picked up another seat.

By 7.30pm supporters chanted ‘‘one more seat’’ as the results swung in their favour. Less than 10 minutes later the chant had turned to ‘‘four more years’’ and ‘‘Daniel, Daniel’’ as the scale of the massive victory became clear.

As the full extent of Labor’s victory sunk in, a senior party source said the result had been several years in the making.

‘‘This election was done many years ago, it was the Premier’s complete focus on getting things done,’’ the source said.

‘‘This election [victory] dates back to the May 2015 budget when we financed the Metro Tunnel and level crossing removals, and [comes from Mr] Andrews’ fierce focus on things people care about – health, education and transport.

‘‘This is too strong for federal factors alone, it’s a laser-like focus on things that matter.

"It’s an extreme endorsement of the strategy taken to the election by the Premier."

Mr Pesutto said his party was going to have to have ‘‘a root and branch’’ review to determine what had gone so ‘‘horribly wrong’’.

‘‘We shouldn’t be in this position,’’ he said.

‘‘I’m looking at some people who are very good MPs ... I’m seeing them at serious risk of losing their seats and I feel for them.

‘‘We have to remember what we’re here for as a party, what kind of party we need to be.’’

Former Victorian Premier Jeff Kennett has spectacularly called for state party president Michael Kroger to resign before midnight.

"If there's one person who should stand down tonight it's Michael Kroger," he told Seven News.

"And he should stand down before the clock strikes 12(am) because I think his leadership of the party over recent times has been appalling."

Mr Kroger said it was not uncommon for Mr Kennett to call for people to resign.

"Jeff regularly calls on others to resign. I wish him well," he told Sky News.

"The organisation does whatever it can to support the party. But of course it's a collective responsibility, Matthew Guy, the parliamentary team, the president, everybody.

"To try and get one person and say that person should go, that's nonsense."

Former Liberal vice-president Greg Hannan said the scale of the loss was devastating.

‘‘We were bracing ourselves for at worst a modest loss,’’ he said. ‘‘We were not expecting a catastrophe of this scale.

‘‘The Liberal Party needs to focus on voters and stop focusing on itself.’’

A senior Labor figure said the win was an endorsement of the vision the government had presented over the past four years and for future generations.

‘‘We just stuck to the core things that matter to people’s lives,’’ the figure said.

‘‘The Liberals made a bad call about a narrow campaign of scaremongering without a positive vision.’’

The Labor figure said the new MPs would need plenty of support to move into their new jobs, particularly considering some of them had not expected to win their seats.

Long-serving federal Liberal MP Kevin Andrews was at the Veneto Club and said he had detected ‘‘no hostility’’ towards the Andrews government while doorknocking in the past two months.

"My sense was that whilst I thought we were running a good campaign, Labor was going to be returned."

Mr Andrews, a conservative who voted for Peter Dutton in the leadership spill, rejected the notion that division in the federal Coalition hurt the state campaign, He argued Victorians had simply chosen to give Labor a second term.

‘‘If the swing is the size it’s looking now I think any federal impact is fairly minimal,’’ Mr Andrews said.

‘‘When it’s a big swing like it looks, that’s obviously state issues.’’