The independent State MP Robert Oakeshott's decision to seek a switch to federal politics has presented the Nationals with a headache at the federal level but a chance to increase their representation in State Parliament.

Mr Oakeshott announced yesterday that he would stand as an independent candidate in next month's byelection for the federal seat of Lyne, which is being vacated by the former Nationals federal leader Mark Vaile.

If elected, he would pursue issues including locals' desire for more doctors and dentists, funding for Pacific Highway roadworks and "maximum dollars for our region" from the Federal Government's new infrastructure fund.

"The Oakeshott independent team recognises we will be outspent by other campaigns by at least 20 to one," he said.

"However, we believe in our community, we have a proven track record of 12 years in State Parliament of delivering for our community and we are excited and enthusiastic about the opportunity that is before us."

The Nationals federal leader, Warren Truss, accused Mr Oakeshott of helping Labor, which will not stand in Lyne.

"No doubt he will have considerable support from Labor and other forces in his campaign," Mr Truss said.

Mr Oakeshott secured 80pc of the two-party preferred vote last year in the state seat of Port Macquarie, which makes him the favourite to win the byelection, on September 6.

That would hurt the Nationals federally, keeping their numbers in the House of Representatives at nine (after Mr Vaile's departure) and creating more pressure for a Queensland-style merger with the Liberal Party.

But Mr Oakeshott's decision means the Nationals are almost certain to secure another seat in State Parliament.

Their candidate for Port Macquarie is likely to be Leslie Williams, a nurse who stood against Mr Oakeshott last year.

Labor and the Liberals are both unlikely to contest the state seat.

A Nationals win would raise the coalition to 36 seats in the lower house - 14 Nationals and 22 Liberals.

The Premier, Morris Iemma, said Labor should not waste its time or money contesting a candidate in Port Macquarie.

"It's a National Party stronghold … the last time we ran the seat I think the vote was 26pc," he said.

A date has not been set for the state byelection because Mr Oakeshott has not yet resigned from his State seat.

It is unlikely to be before October 18 because of the Lyne byelection, the local government elections and school holidays.