The most populous state in Australia will not allow more than 100 Liberal Party candidates to run for council after the party missed an election nomination deadline due to a "monumental stuff up."

According to New South Wales (NSW) officials, they are constitutionally unable to accept late entries. Based on this, one of Australia's leading election experts projects the party will likely lose approximately fifty council seats.

There won't be a single Liberal Party candidate for eight municipalities, and a number of long-serving lawmakers will automatically lose their jobs.

Richard Shields, the director of the state party, has apologised and attributed the delay in finishing the paperwork to "limited resources".

In a letter to MPs, the party's state parliamentary leader Mark Speakman described the episode as "probably the worst act of mismanagement" in the party's history, saying Mr Shields should have asked for more resources.

His position is untenable, Mr Speakman added, and he has been asked to step down.

Election analyst Ben Raue says the exact number contests affected is still to be confirmed, but he calculates the Liberal Party is 136 candidates short of a full ticket.

In a post on his Tally Room blog, Mr Raue said those who have missed the ballot include 38 sitting councillors.

Sitting councillor Paul Ell - who was planning to run for mayor of the Shoalhaven City Council, in the state's south - is among those set to lose their position.

"It's obviously upsetting and devastating for us personally, but most of all, it's bad for local democracy in the community," he told the Australian Broadcasting Corporation (ABC).

In Wollongong, about 90km south of Sydney, the error has effectively ended the 13-year council career of John Dorahy, but he says he is still hopeful officials will consider leniency.

However, in a statement the NSW Electoral Commission said it is bound by the law, which "does not allow the Commission to accept a late nomination form or allow changes to forms that were submitted once the deadline has passed".

The saga has sent the NSW Liberal Party into crisis, with senior Liberal MPs lining up to express their outrage.

Deputy parliamentary leader Natalie Ward told radio station 2GB she is furious over the "monumental stuff-up", while Antony Roberts told the ABC it was "abysmal".

"It's absolutely catastrophic, I've never seen - in my 30 years of public life - anything so bad," he said.

In a statement on Wednesday Mr Shields said: "On behalf of the secretariat, I would like to apologise to Liberal-endorsed councillors that were not nominated and to the party membership more broadly."