Melbourne city councillor Cathy Oke will take on her council ally, Labor’s Jennifer Kanis, in a byelection battle for the heart and soul of Melbourne.

Crikey can reveal Oke, the sole Green on the MCC, was given the overwhelming green light last night by the party’s 120 local members, beating off Adam Bandt adviser Rose Iser by a significant margin in a secret ballot.

Oke, who has successfully combined with Kanis since their 2008 election to enact progressive policies under the conservative yoke of Liberal lord mayor Robert Doyle, told Crikey this morning the election would be fought around “putting policies forward for the electorate”.

“Our campaign will be about investing in public transport, innovative financing ideas and putting people back into the centre of planning,” the high-profile sustainability consultant said.

Nominations for Labor’s candidate closed at midday with Kanis, a sharp and genial Holding Redlich lawyer, the only nominee following veteran MP Bronwyn Pike’s resignation last Monday. Kanis will launch a no-holds-barred tilt focusing on Labor’s progressive credentials and the ability of the party to legislate for reform in government.

The most likely date for the byelection is Saturday, June 16. Under parliamentary rules, writs must be issued within 30 days of a resignation, with the byelection to be held somewhere between 25 and 58 days after that. If writs were issued today, June 9 could technically be on the table, but that clashes with the Queen’s Birthday long weekend.

The Oke victory is a triumph for Northern Metro upper house MP Greg Barber’s loyal band of state-based Greens, some of whom were concerned about the steady expansion of federal MP Bandt’s sphere of influence. Bandt had privately backed Iser, a former Moonee Valley councillor and unsuccessful Essendon candidate.

Barber told Crikey this morning Oke had “delivered on council” and will run a “great campaign”. Last week’s green-tinged city council budget should be held up as a concrete demonstration of Oke’s perseverance, Barber said.

Oke, who was the first councillor to publicly back Occupy Melbourne, will face a vigorous campaign from Labor Left strategists in the seat, who have promised to throw the kitchen sink at the party to preserve the ALP stronghold they have controlled continually since 1908.

The Liberals have yet to announce their intention to field a candidate for the fight, which they can’t win and which could serve as a positive or negative referendum on Ted Baillieu’s power. In 2010, after an 11th-hour Herald Sun intervention from Helen Kroger telling the state branch to put the Greens last on how-to-vote cards, Pike successfully expanded her margin on Liberal preferences. A Liberal candidate would be expected to again put the Greens last.

While early indications suggest the Libs won’t run, a recent sequence of events could give them pause for thought.

The Legislative Assembly is currently on a knife edge with the Coalition holding 45 seats to Labor’s 43. Embattled Frankston MP Geoff Shaw, sitting on a perilous 2% margin, is in strife over a legal dispute, his marital status and alleged moonlighting in his private accountancy practice and other firms. If Frankston was re-claimed by Labor at a byelection, and the Greens won Melbourne, Oke could conceivably hold the balance of power in Victoria. Crikey understands that Liberal party room players, including Bernie Finn, have expressed concern over that scenario.

There’s also an alternative mode of thought. If Labor wins Melbourne and Frankston, the Parliament would be deadlocked at 44-all, and a fresh election would be inevitably be called (in which Baillieu may well extend his majority). In that case, it might be wiser for the Libs to run a candidate in Melbourne and preference the Greens, giving them some wriggle room to keep governing in a 44-43-1 configuration. However, that could lead to a Peter Slipper-style squabble over the position of Speaker.

Before the November 2010 election, Baillieu and deputy premier Peter Ryan were scathing of the Greens’ ideology, suggesting the previous preference decision was about more than just energising the base.

“Many of their policies are a threat to the economy, especially from a regional perspective,” Ryan said at the time.

Baillieu reiterated the stance on ABC Radio: “I have respect for anybody elected to Parliament, I treat people with respect (but) … we have significant differences of policy views with the Greens …”

April Newspoll showed Labor and the Greens closing the gap in Victoria, with the Coalition leading Labor 51-49 on two-party preferred basis, compared to 51.6-48.4 on election day 2010. However, the ALP’s primary vote is down to 32% from 36.2%, with the Greens riding high on 17%, up from 11.2% at the election (the Coalition’s primary has declined 2.8% from the election to 42%).

Even without the Liberals’ input, Oke would seem to be in with a serious chance to become the party’s first Victorian lower house MP. Her friend Kanis will pull out all stops to prevent that from happening.