Mr Tilley told The Border Mail this week the Liberal Party wouldn’t field a Euroa candidate.

Victorian Liberal Party state director Damien Mantuch said later a decision was yet to be made.

“To suggest the Liberal Party has decided to not field a candidate in Euroa is incorrect,” he said.

Euroa covers most of the abolished Benalla seat held by retiring National Party MP Bill Sykes; most of the old Nationals-held seat of Rodney; and part of the old Seymour electorate held by Liberal Cindy McLeish.

Euroa is regarded as notionally Nationals-held with a margin of 13.6 per cent, according to the ABC’s Antony Green.

Previously, where a sitting Coalition MP from either party retired, the Liberals and Nationals could each run a candidate.

A Coalition deal signed six years ago now prevents the parties running a candidate against each other when a sitting member of the other party is retiring. 

Interpretations have varied on what this means with boundary changes and new seats.

The Nationals have said they won’t run a candidate in Eildon, a new seat including parts of the old Benalla and Seymour and areas towards Melbourne, which Ms McLeish will contest.

The only three-cornered contests so far are in Ripon and Buninyong, both now Labor-held.

Mr Tilley said he had made his statement based on his understanding of the political climate and conversation.

“It’s based on the general feel at the moment, I don’t think there’s any real fighting about it,” he said.

“We do have a Coalition agreement, and maybe defining the exact detail of that may have some loose ends.

“The Nationals have preselected an exceptional candidate — if she’s successful, and I also win, I’d be happy to work with her.”

The Liberals’ electorate chairman for Euroa, Jason Ronald, said negotiations were ongoing with the Nationals.

“I personally think we have our best chance in Euroa if we stand a candidate from both parties, and it would be a friendly contest,” he said.

“We certainly have a number of candidates interested in preselection.”