When Heffer announced his retirement, Lesley Mahmood, a "Broad Left" councillor and a member of Militant, stood for the Labour nomination. Peter Kilfoyle, who had been the Labour Party organiser in the city since 1985, gained the nomination by a narrow margin; he had been involved in removing Militant influence from the Liverpool Labour Party. Mahmood stood as a "Walton Real Labour" candidate.
Kilfoyle was able to win the election, taking a majority of the votes cast (53.1%), although 11.3% down on Heffer's result in the 1987 election. The Liberal Democrats gained from the division in the Labour Party and increased their vote to come second. Mahmood was only able to take a distant third place with 6.5% of the vote. The Conservatives were beaten into fourth, for the first time in Britain since the Bermondsey by-election, 1983, and lost their deposit. They did not place fourth in an English by-election again until the Hartlepool by-election, 2004.
Some of Militant's leaders, Ted Grant and Rob Sewell, had remained convinced of the merits of entrism and argued privately against Mahmood standing. The candidacy was part of the process in their rejection of Entryism, or as they saw it, their open turn, and the expulsion of Grant.