Premier Danny Williams told reporters Tuesday night there is a lesson for his government in the byelection loss to the Liberals in The Straits-White Bay North. (CBC)

Newfoundland and Labrador Premier Danny Williams says Tuesday night's byelection loss for his party comes as no surprise.

Williams told reporters Tuesday night, shortly after the results were final for the district of The Straits-White Bay North, that he knew it would be a close, hard battle.

"You win some and you lose some," Williams said, "and that's the way it is."

Liberal candidate Marshall Dean won the seat by 126 votes.

Dean received 1,925 votes, while 1,799 people voted for Progressive Conservative candidate Rick Pelley. New Democrat Dale Colbourne got 321 votes.

Williams put a positive spin on his government's byelection loss, the first since the 2007 general election.

"It's a good check for a party that's been in government now for six years, that [is] showing popularity all through, and [has] the support of the people of the province."

The byelection followed an intense three-week campaign, during which a controversial health-care decision emerged as the biggest issue.

The provincial government initially announced at the end of the summer that it was scaling back clinic hours and services in Flower's Cove, a small community within the electoral district.

The decision sparked outrage and protests from people who lived in the area.

Sensing the public anger, many members of the provincial cabinet spent the last days of the campaign in the district, going door to door. Late last week, the provincial health minister announced that the decision to cut services would be reversed.

"It goes to show that no matter what you do in a district, that sometimes it doesn't matter," Williams said. "We've stepped up for the Straits in a big way. We spent over $130 million there, and put some major projects there. But the people decided at the end of it, you know, that they're not going to put us back in, and you know, there's a lesson in that for us."

Liberal Leader Yvonne Jones said people should see the result as a comment on the management style of Williams.

"People want a voice, and there isn't a voice inside the Williams government," she said. "Most of the backbenchers are silent. Many of the cabinet ministers are allowing critical cuts to happen in their districts without ever speaking out against it."

The byelection doesn't lessen Williams's hold on power. The Progressive Conservatives still hold 42 of the 48 seats in the legislature, the Liberals occupy four seats and the NDP one.