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More than 100 Liberal Party candidates will be unable to run for council in Australia's most populous state, after a "monumental stuff up" saw the party miss an election nomination deadline.

New South Wales (NSW) officials say they legally cannot accept late entries, with one of Australia's top election analysts estimating the party is likely to lose about 50 council seats as a result.

Several long-serving politicians will automatically be out of a job, and constituents of eight councils will not have a single Liberal Party candidate to vote for.

State party director Richard Shields has apologised and blamed "limited resources" for the failure to complete paperwork in time.

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.

Current 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 Anthony 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."