Lib Dem candidate promises to deliver an upset in Mandelson's old hunting ground

It is 8pm on the evening before the last full day of campaigning in the Hartlepool by-election and the orange- encrusted headquarters for the Liberal Democrat campaign is a blur of activity.

Volunteers are coming and going, telephones are being worked, envelopes stuffed, lists of voters scrutinised. Their candidate, Jody Dunn, a barrister and mother of four, returns exhilarated from the battlefront; people round here don't like their doors knocked after dark, but there's still plenty of work to do.

They've been at it for eight weeks in an attempt to pull off a famous victory in a Labour stronghold now up for grabs following the departure of Peter Mandelson for Brussels and energy levels remain high. "We haven't packed up before midnight for weeks now," Ms Dunn says, "and some people will be here all night. A lot of people are making up their minds in the last 24 hours. We think we can do it.''

Around the corner, in South Road, the headquarters of the Labour candidate, Iain Wright, the red metal shutters are pulled down. Mr Wright is watching his beloved Hartlepool United; everyone else seems to have called it a night. Is the Labour team simply displaying confidence their majority of 14,571 will hold up? Or is Mr Wright guilty of complacency? Today, the voters of Hartlepool will deliver their verdict. But there are signs they could be about to deliver a serious shock to Labour; getting close to a Labour defeat would be a serious blow, bigger than their recent victories in Brent East and Leicester, where they were helped by a sizeable anti-Iraq Muslim vote. Here the Muslim vote is negligible; victory would be stunning.

While Hartlepool itself, population around 88,000, is geographically isolated, the by-election has put it at the political centre of the nation. Although being fought largely on local issues and the very "localness" of the candidates - it represents a big test for the Government, two days after Mr Blair's Brighton speech and ahead of next week's Tory conference and an almost certain general election next spring.

Then there is the Mandelson factor. Almost everyone is caustic about his term of office as MP: "He was never here" and "He didn't do much for Hartlepool" are the common refrains. Significantly, Mr Wright is very much the local man and Mr Mandelson has not been present during the campaign. Neither does anybody attribute to him the relative prosperity of the town, which declined following the collapse of traditional industries but now boasts a smart shopping centre, a restored marina and tidy housing estates.

It is on one such estate that Mr Wright was out canvassing earlier this week. Mick Hill, the party's regional organiser, maintains the vote is holding up but there's a suspicious lack of "Vote Wright" posters around.

Mr Wright himself, a personable individual and a father of three, looks like the young accountant he is. Word has it he was deliberately chosen as the candidate "most unlike Mandelson"; some local Labour councillors have declined their support, accusing him of being a lightweight puppet. His only shared characteristics with Mr Mandelson are a fashionable haircut and an ability to deliver New Labour platitudes on cue.

"I'm confident, not complacent, people are saying to me on the doorstep, 'Don't worry kidda, we'll be there for you.''' Difficult to imagine them calling Mr Mandelson "kidda", but the youthful-looking Mr Wright somehow invites it.

The doorstep issues, he says, are not Iraq or the economy, but crime and the fear of it, antisocial behaviour and drug- taking. He rejects suggestions of a negative campaign focusing on Ms Dunn's initial ambiguity over where she lives - she's now renting in the town - and some critical comments on her Web diary after a bad night on the stump, which she claims were taken out of context.

Ms Dunn, 35, who is half-Finnish, worked as a disc jockey before studying for the Bar in the late 1990s. She has focused on Labour's apparent inability to guarantee the future of the local hospital. "One day to save the hospital" said the window in her HQ yesterday, slightly disingenuously. She says Labour has focused on her and not presented their own policies.

Working the shopping centre yesterday, Ms Dunn impressed potential voters. But they too, despite the candidates' views that Iraq was not an issue, happily link distrust of Labour at local and national level: Bernard Robertson, 69, and his wife, Margaret, 64, lifelong Labour voters, will back her tonight. "We like her - and we don't like Blair any more. I don't think he's going to be leader for much longer.'' Another woman - "just call me Joan" - said: "I'm a lifelong Conservative and she's convinced me. I'm voting for her and so are my daughter and son-in-law. The war has done it for us." Dwayne Thomas, 23, a cable puller, accepted his orange sticker happily: "It [Blair's speech] wasn't much of an apology was it?''

Jason Alexander, 35, managing director of the local radio station and a former Labour voter, added: 'The town needs a change. I hope Jody will get in. She's her own person, she'll stand up and speak out and not be a poodle for anybody.'' In this fierce battle, Jeremy Middleton, the equally presentable Conservative candidate, a small business consultant from Newcastle, but chosen only in September, is struggling to be heard; his team recognises the soft Labour vote is more likely to go to the Liberal Democrats than to him, while Stephen Allison, the United Kingdom Independence Party candidate, will be expected to take some of his vote.

Mr Middleton's problem was summed up by Brian Chisholm, 69, a retired production engineer, whom he encountered yesterday in the seaside suburb of Seaton. Mr Chisholm, describing himself as a "classic floating voter", told him: "I don't think you have enough strength to get them out, so I'm making my protest with the Lib Dems.'' He said: "We've been lied to by Blair and there's no way did I believe his apology.''

On Wednesday night, Mr Wright saw his team draw 3-3 with Hull, but squeak through to the next round of the LDV Cup on penalties. Whether Mr Wright escapes defeat by a narrow margin, we will learn much later tonight.

THE CANDIDATES

Edward Abrams (English Democrats);

Stephen Allison (UKIP);

Philip Berriman (Independent);

John Bloom (Respect);

Ronnie Carroll (Independent);

Jody Dunn (Liberal Democrat);

Christopher Herriot (Socialist Labour Party);

Alan Hope (Monster Raving Loony Party);

Jeremy Middleton (Conservative);

Richard Rodgers (The Common Good);

Iris Ryder (Green Party);

James Starkey (National Front);

Paul Watson (Fathers 4 Justice);

Iain Wright (Labour).

General Election result in 2001:

Peter Mandelson (Labour) 22,506;

Gus Robinson (Conservative) 7,935;

Nigel Boddy

(Liberal Democrat) 5,717;

Arthur Scargill (Socialist Labour) 912;

Ian Cameron (Independent) 557; John Booth (Ind) 424