Updated 19.50pm 
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THE SOCIALIST PARTY’S Paul Murphy has won the Dublin South-West by-election, upsetting the odds to take a Dáil seat that Sinn Féin had been heavily backed to win.

Murphy beat Sinn Féin councillor Cathal King in a tight race with just 566 votes between the pair after the eighth and final count at the National Basketball Arena in Tallaght.

King led throughout much of the count but Murphy was able to whittle down Sinn Féin’s initial lead of 748 votes over the Socialists thanks to transfers from several other party and independent candidates as they were eliminated.

Earlier in the day, independent candidates Colm O’Keeffe and Tony Rochford, Green Party candidate Francis Noel Duffy, People Before Profit’s Nicky Coules, independent Declan Burke, Fianna Fáil’s John Lahart, and Labour’s Pamela Kearns were all eliminated.

Eventually, Murphy benefitted from the transfers of eliminated independent Ronan McMahon and Fine Gael’s Cáit Keane to overtake King with 9,565 votes to 8,999 on the final count the result of which was confirmed just after 5.30pm.

Socialist TD Joe Higgins declared the result an “earthquake” to the political system while Murphy said the message to the government was clear:

“Axe the water charges. Axe the tax or watch your vote collapse in the next general election.”

The result is a blow to Sinn Féin who had been tipped to take the Dáil seat vacated by Fine Gael’s Brian Hayes after his election to the European Parliament last May.

The campaign was dominated by the water charges debate.

While Sinn Féin gave a commitment to abolish water charges if in government, the party said it would retain the new utility Irish Water and fund it through general taxation. King said he would not be paying his water bill while senior party figures said they would.

The Socialists argued for the outright abolition of Irish Water and called on voters to boycott their water charges and mount a campaign of non-payment.

There were also accusations of ‘dirty tricks’ after a fake Facebook comment by Murphy was shared by some Sinn Féin representatives including deputy leader Mary Lou McDonald.

Eliminated John Lahart, a Fianna Fáil councillor, said his challenge in the by-election was that people would “know my name”, saying: “I am coming out of it energised, and I am looking forward to the next year, building on that.”

Fine Gael senator Cáit Keane admitted “issues on the ground” affected her campaign citing “water charges in particular”. She said that “people are hurting”.

“I suppose it was a pity the Budget didn’t come before the election not after it because definitely changes in their own pocket does matter,” Keane said.

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Earlier… 

King had been widely tipped to win the seat, but Murphy was looking on course to win not long after the boxes were opened at 9am this morning when he appeared to be neck-and-neck with the Sinn Féin candidate.

Sinn Féin, notoriously weak on transfers, accepted it would struggle to maintain its 748 after the first count and sources admitted the party had lost ground in the final weeks of the campaign as the water charges issue dominated.

• Read: Dáil hopeful Cathal King admits Sinn Féin’s policy on water charges ‘confused’ voters

Speaking to TheJournal.ie earlier this morning, a confident looking Murphy insisted it was “too early to say” what would happen.

The low turnout – just under 35 per cent – was also expected to work again Sinn Féin which had mounted a strong and well-resourced campaign for the seat where it already has a sitting TD, Seán Crowe.

This morning, Murphy was reported to have outpolled King by 3-to-1 in the Templeogue and Kilnamanagh areas of the constituency.

The former MEP, who ran under the Anti-Austerity Alliance banner, was also said to be nearly level with King in the Sinn Féin stronghold of Jobstown where the AAA mounted a strong campaign in recent weeks.

More: The country will have two new TDs today*