As candidates prepared for  a town hall debate in Coburg on Wednesday night, the field of realistic contenders had narrowed, with one formal withdrawal and at least one other candidate accepting defeat.

A plum Labor seat once held by Bob Hawke, Wills is a key test of the party's internal democracy and gender policy under Bill Shorten.

It comes at a difficult time, with Malcolm Turnbull continuing to ride high in the polls, and the Victorian party in turmoil over over branch-stacking.

Bill Shorten is believed to be comfortable with two candidates – his own staffer Anna Maria Arabia, and Peter Khalil, a Victorian multicultural commissioner and former security adviser.

Mr Khalil, of Egyptian background, also has the support of Right-faction heavyweight and neighbouring Batman MP, David Feeney.

An important development in the preselection is that local Kurdish and Lebanese groups are close to a deal to back Mr Khalil, a non-local but a candidate with an understanding of Middle Eastern issues and the plight of the Kurds.

Mr Khalil has firmed as a favourite along with Ms Arabia and Mehmet Tillem, a former senator, local numbers man and adviser in the Andrews government.

Increasingly, the contest appears to be down to these three – out of a field of seven – with Mr Shorten and Mr Feeney determined to block Turkish-born Mr Tillem. He is viewed by many as archetypal Labor warlord and, therefore, the wrong type of candidate for such a high profile seat.

But Mr Tillem has the full backing of the defence shadow minister, and formidable factional hard man, Stephen Conroy.

Although not well known in the party, Ms Arabia ticks many boxes important to Labor's push for wider community relevance, including her gender, age (''40ish"), her Italian background and her qualifications as a scientist (therefore not a union leader or lawyer). Nor is she known as a factional player, having also worked for Mr Shorten's leadership rival in 2013, NSW Left-faction leader Anthony Albanese.

Preselection is a two-stage process, the first stage a ballot of local members, the second a vote by a central panel elected by state conference and unions.

An important factor – especially for Ms Arabia and Mr Khalil – will be the choice of candidate by the shrinking but still powerful Australian Workers Union, Mr Shorten's former union. AWU support will be especially important at the second, central vote.

Campaigning hard is funds manager and former Yarra councillor Josh Funder. But without a strong local vote or factional and union base, he will struggle.

Melanie Raymond, a candidate earlier backed by the Feeney camp, has withdrawn from the Wills race, which was triggered by the resignation of long-time maverick member, Kelvin Thomson.

The Age understands that candidate Lambros Tapinos – a Moreland councillor also linked to the Feeney group – has all but given up hope of winning after losing the support he expected from the Kurdish and Lebanese groups.

Under a stability deal between the party's two dominant factions, the right wing ShortCons (named after Shorten and Conroy) and the left group led by veteran party boss Kim Carr, Wills is a Right-faction seat

If the Labor right delivers a crony numbers man as the candidate for Wills, it will be gift to the Greens who increasingly view the seat as winnable.