Liberal Leader Stephane Dion lost his first electoral test Monday night as the NDP won the Montreal riding of Outremont, while the Conservatives took a seat from the Bloc Quebecois.

In the hotly-contested Outremont riding, NDP candidate Thomas Mulcair managed to maintain his lead over Liberal hopeful Jocelyn Coulon, who had been hand-picked by Dion.

Despite the loss, Dion remained defiant as he addressed Coulon's supporters.

"We don't know when, but there will be general elections and we will win them," he vowed.

Dion then added: "The results of these byelections are not what we hoped for, but with every setback we have the opportunity to learn and grow."

It's only the second time the Liberals have lost the riding since 1935, and analysts said the loss could raise serious questions about Dion's leadership.

One anonymous Liberal MP pointed out to The Canadian Press that the Liberals' current seat-count in Quebec -- 12 of 75 -- is the lowest since Confederation.

"There are going to have to be changes in the leader's entourage," said the MP.

Meanwhile, Conservative candidate Denis Lebel took a commanding lead in the Bloc stronghold of Roberval-Lac-Saint-Jean, eventually taking the seat.

And in the riding of Saint Hyacinthe-Bagot, east of Montreal, the Bloc Quebecois held the riding, with candidate Eve-Mary Thai Thi Lac beating Tory hopeful Bernard Barre.

Dion had helped Coulon campaign in Outremont this past weekend, and brought along two high-profile party members for added help: Hockey Hall of Fame goaltender Ken Dryden and Justin Trudeau.

But Mulcair mounted a strong challenge against Coulon, and polls released last week had shown him leading.

Monday night's results clearly show a wounded leader in Dion, CTV Ottawa bureau chief Robert Fife said.

"Not only did the Liberals fail to hold on to one of the safest Liberal ridings in the country, in Outremont -- outside of Montreal they came in with less than 10 per cent of the vote in a purely francophone riding."

"This is very bad news for the Liberals, and what it says to the rest of the country is, if you have a Quebec leader who can't win in Quebec, why would people in Ontario and the rest of the country vote for Mr. Dion?"

As for the Tories, who won 60 per cent of the vote in Roberval-Lac-Saint-Jean and came in a strong second in the Hyacinth riding:

"What it shows here is that the Liberal party is marginalized outside of Montreal, and it now comes down to the Conservatives as a real federalist force in Quebec outside of Montreal against the separatist Bloc Quebecois."

In the 2006 federal election, the Tories came in second in about 40 ridings outside of Montreal.

Monday's victory marks only the second seat the New Democrats have ever held in Quebec.

"Today, Quebec has chosen a new direction," NDP Leader Jack Layton told supporters in Outremont, and praised them for "making history and changing the direction of politics in Quebec and across Canada."

In the morning, accompanied by Layton, Mulcair had said winning the riding would represent an important milestone for the party.

"For the future we are hoping that what people see here now about the NDP is something that we are going to be able to take to the ballot box, not only in the election here in Quebec but the rest of Canada as well, as people realize we are a national party with representation everywhere," he said.

The Conservatives now hold 126 seats in Parliament, while the Liberals have 96, the Bloc 49 and the NDP 30.

Three seats are held by Independent MPs and four remain vacant.

With reports from CTV Montreal's Herb Luft and Stephane Giroux