The NSW government has avoided collapse after Nationals leader John Barilaro backflipped on his threats to effectively bring down the coalition because of a rift over the state's koala protection policy.
NSW Premier Gladys Berejiklian stared down her deputy at a crisis meeting on Friday morning, where Mr Barilaro backed away from threats to move his party the cross bench, made less than 24 hours earlier.
In a joint media statement, Ms Berejiklian and Mr Barilaro confirmed the coalition remained in place and the Nationals' concerns over the koala policy would be dealt with at an upcoming cabinet meeting.
Mr Barilaro later on Friday said the assurance that the matter would be discussed at cabinet was a "victory".
"All we have ever asked for was a resolution around the koala SEPP and the impact that has on our communities, and what we wanted was an opportunity to take that to cabinet," he told 2GB radio.
"We've got the win there today."
However, AAP understands Ms Berejiklian had earlier in the week already agreed the matter would be discussed at a scheduled cabinet meeting, and Mr Barilaro's outburst was because it wasn't happening soon enough.
The Nationals leader blindsided Ms Berejiklian on Thursday by announcing his MPs would abstain from voting on coalition bills and would be "effectively on the cross bench" as they fought changes to the protection plan.
He said changes to the Koala Habitat Protection State Environmental Planning Policy were "wrong" and hurt landowners and farmers.
The Nationals are concerned the koala policy limits land use on farms and the ability to rezone areas for development as more trees are classed as koala habitat.
The defection provoked an ultimatum from Ms Berejiklian, who told Mr Barilaro and his Nationals colleagues to declare support for her government by 9am Friday or be sacked from cabinet.
Treasurer Dominic Perrottet made it clear the coalition was united after constructive discussions were held between the premier and Mr Barilaro.
"We have a very healthy coalition," Mr Perrottet told reporters on Friday.
He noted "nothing has changed" regarding the policy, and reiterated that differences over koala protection will be resolved through the cabinet process.
"Any matter or disagreement on public policy are dealt with through the cabinet processes... and that is the commitment the deputy premier made today," he said.
But some Liberals questioned Mr Barilaro's leadership of the Nationals, with Police Minister David Elliott hitting out at his coalition colleague.
"It is disgusting to divert attention to something not even on the political radar at a time like this," he told reporters in Dubbo.
"The disloyalty that we've seen out of the deputy premier makes his position untenable."
NSW Labor leader Jodi McKay said Mr Barilaro was unfit to lead the Nationals.
"The National Party can't continue to back him, not with what we have seen in the last couple of days," she told reporters.
Ms McKay argued Mr Barilaro had acted out "too many times" and the premier should have pulled him into line earlier.
The opposition leader flagged she would move a vote of no confidence in the government when parliament resumes next week.
The Nationals have 13 lower house MPs, while the Liberals have 35 and Labor 36.
In the upper house, the Nationals have six, the Liberals have 11 and Labor 14.
Australian Associated Press