David Marshall resigned as Chief Minister on 7 June 1956 after the discussions he initiated with the British for self-governance broke down. His successor, Lim Yew Hock, led another delegation a few months later that included opposition leader Lee Kuan Yew. Marshall, as a LF backbencher, derided Lee for compromising to the British's terms and challenged to contest his constituency of Tanjong Pagar, a dare Lee accepted. Lee resigned his seat on 26 April 1957, followed by Marshall three days later but the latter announced his retirement from politics instead, pressured by speculations that bloodly street protests would soon break out. Lee was successfully returned in his seat. LF fielded another candidate in Marshall's place but victory went to the new LSP, which was formed by the merger of PP and DP. By then, three LF Assembly Members had either been expelled or resigned from their party, while independent AM M. P. D. Nair had joined LF. LSP gained and lost one AM, with independent R. Jumabhoy joining and Lim Cher Keng, formerly from DP, resigning. KM was expelled by UMNO and MCA from their alliance for contravening an agreement by component parties to stay away from the by-election. KM's sole lawmaker supported the expulsion and defected to UMNO.

Writ of election: 3 May 1957 [Fri]
Nomination day: 18 May 1957 [Mon]
Polling day: 29 June 1957 [Fri]
Members swearing-in: 17 July 1957 [Wed]

Eligible voters: 29,563
Voter turnout: 12,874 (43.5%)

Election deposit: $500

Cairnhill Tanjong Pagar

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