One Nation won its first ever lower house victory on Saturday night, with Pauline Hanson’s insurgent party easily winning the Farrer byelection amid a collapse in the Coalition vote.

Irrigator David Farley soundly beat independent Michelle Milthorpe in the closely watched race, translating for the first time One Nation’s dramatic rise in public support since last year’s federal election to a clear result in parliament. The loss of the previously Liberal seat will further weaken Angus Taylor’s depleted party.

Early booths in small rural communities showed strong support for One Nation, with the Liberal vote tanking, and Milthorpe’s vote also down.

Picking up the regional New South Wales electorate held by former opposition leader Sussan Ley for a generation is the first time voters have handed One Nation a lower house seat in an election or byelection.

Hanson, elected to parliament as an independent in 1996, founded the populist party in 1997, while Nationals defector Barnaby Joyce joined One Nation last year while already an MP.

Before 8pm, election analyst Antony Green said Milthorpe was gaining primary votes in Albury, but going backwards after preferences.

“All the trends point to One Nation finishing on around 41% and Milthorpe on 28% on which basis David Farley will win for One Nation,” he said.

The Liberal candidate, Raissa Butkowski, and the Nationals’ Brad Robertson were never considered strong chances to win, despite the Coalition parties holding Farrer for its entire 76-year history. Labor opted not to contest the race.

One Nation’s victory comes after months of the party’s support growing beyond 20% in opinion polls.

The win prompted Nationals frontbencher Bridget McKenzie to suggest the Coalition could work with One Nation to form government in the future.

“I’d be willing to work with anyone that wants to see Anthony Albanese leave The Lodge, that wants to see sensible water policy for the Southern Connected Basin, and that actually wants to see regional Australia get their fair share,” McKenzie told the ABC.

Independent MP Helen Haines, who holds the neighbouring seat of Indi, blamed a preference deal by Taylor and the Nationals’ leader, Matt Canavan, for the expected result. The Coalition backed Farley over Milthorpe, who had financial backing from Simon Holmes à Court’s Climate 200 organisation.

“The Liberal party and the National party have smoothed the runway for One Nation, by preferencing One Nation,” Haines said.

Luke Mansillo, a political scientist at the University of Sydney, said the result would redefine the political landscape.

“The Australian party system is being redefined from the stable political conflict between class interests and urban and rural interests that has held for the most part since 1910,” he said.

“After decades of seeing the future disappear through things like agricultural price guarantees disappearing and younger generations leaving the regions, those who cannot see a future have gone to extremes in a scream of desperation.”

But Farley’s road to becoming One Nation’s newest MP has been rocky in recent weeks amid revelations the Narrandera-based agribusiness consultant was once a Nationals branch member and even considered standing for Labor.

Guardian Australia revealed on Friday the extent of his earlier cooperation with the independent movement, as minders sought to shield Hanson and Farley from media questions.

One Nation has blocked media outlets including the Guardian from attending its election night event. Hanson has regularly bristled at critical coverage of One Nation.

Farley started the day at Albury public school shortly after 8am.

Missing from his early morning walk to the ballot box was his party leader, but Farley said he would see Hanson later.

She flew into the seat in the final days of the campaign in a new private plane donated by supporters linked to mining billionaire Gina Rinehart.

“Flight risk? No,” he said, when asked about the moniker that Canavan has given him, after reports of Farley’s early dalliances with the Nationals, Labor and independent movement.

Many of the polling stations around Albury were packed with volunteers in orange shirts. Only a few shades of difference distinguished Milthorpe’s and One Nation’s supporters.

Out in Howlong, 25 minutes from Albury’s centre, Paige, 33, voted for Milthorpe despite One Nation’s surging popularity.

The young mum, who lives in the small town, said she felt nervous about the prospect of a One Nation candidate because of “what is happening on an international stage with radicalised ideas”.

“I would like to see an independent get into parliament and hold some of these bigger parties accountable,” she said.

John Lacovich, 76, rolled into the Thurgoona Community Centre on his trike before midday, accompanied by Patch, his nine-year-old Jack Russell.

In the sun’s strong rays, the long-time One Nation voter said he would vote for Farley because of Hanson.

“She’s honest, she knows what we need, and she makes sense when she speaks,” he said.

While many had already called Farrer for One Nation by Saturday morning, some voters who trickled into polling stations were defiant.

Dylan, 24, and Maddie, 25, backed the Legalise Cannabis party for their healthcare policies but are worried about the minor party’s predicted win.

“I don’t think they want to change much. I just think they want to say their opinion a lot louder than everyone else,” Dylan said.

Maddie, a local nurse, said healthcare was her top priority and placed Milthorpe high up the list to receive preferences.

“I like the idea of the new hospital,” she said. “We need a win.”

Liz, 69, said she voted for Milthorpe because she had “sensible attitudes towards other people and other cultures”. She said she wasn’t interested in One Nation or “the others”.

“It’s the attitude of the politicians that I’m interested in, and how much respect they show to all facets of life. That’s more important than, you know, complaining about other people coming from other countries and shit like that. It’s stupid,” she said.

“We’re bloody lucky here that we have roofs over our heads and food and we’re not being bombed.”