Kathleen Folbigg's convictions for killing four of her children will be the subject of an inquiry ordered by NSW Governor Margaret Beazley.
NSW Attorney-General Mark Speakman advised the governor to order an inquiry after she received a petition from prominent scientists asking that Folbigg be pardoned due to new scientific evidence.
Folbigg, 54, was jailed in 2003 after being convicted of murdering her children Patrick, Laura and Sarah, and the manslaughter of her son Caleb.
Mr Speakman announced the inquiry on Wednesday, saying dismissing the petition from March last year would not be a proper option.
"The evidence, clearly in my view, reaches the necessary threshold for some kind of intervention," he said.
"It certainly rises to the level of question or doubt that's referred to in the statute about appeals and reviews in this sort of matter."
However, the attorney-general said the evidence needs testing.
"A simple pardon without that open transparent process, it would not be appropriate," Mr Speakman said.
He apologised to the Folbigg family for the further trauma likely to stem from a second inquiry.
"It will weigh on all our shoulders, the pain and suffering that the Folbigg family has been through, particularly (her husband) Craig Folbigg," he said.
"This is a man who has lost four children over a 10-year period, who has seen his wife convicted of their homicides."
Folbigg was initially sentenced to 40 years imprisonment, with a non-parole period of 30 years, but an appeal later reduced her sentence to 30 years with a non-parole period of 25 years.
Folbigg is not eligible for parole until 2028.
However, scientists calling for her early release argue there is no medical evidence she smothered the children she has been convicted of killing.
The petition came after scientists discovered two of Folbigg's daughters had inherited a previously unknown genetic variant from their mother, which could lead to sudden and unexpected infant death.
Her two dead sons also had illnesses, which could have caused them to stop breathing as they slept.
An inquiry already upheld Folbigg's conviction in 2019, before the emergence of the new scientific evidence.
In order to be fair and equitable, the new inquiry will have to comprehensively consider that evidence, as well as fresh analysis of diary entries that were "cherry-picked" for evidence at the initial trial and first inquiry, Folbigg's solicitor Rhanee Rego said.
"We are confident that the overwhelming evidence will finally free Kathleen Folbigg and prove her innocence," Ms Rego said.
Psychotherapist Kamal Touma, who has assessed Folbigg multiple times, says the diary entries provide proof of innocence, not guilt.
The inquiry will be conducted by recently retired chief justice Tom Bathurst AC QC.
Mr Speakman was not able to detail when the inquiry would start or how long it would take. The previous inquiry took 11 months.
"Tom Bathurst is a very efficient jurist and I'm sure he will run the inquiry as expeditiously as possible," he said.
Mr Speakman said it would be undermining the justice system if he were to bypass a second inquiry and recommend a pardon, and it was important that the process was open and transparent.
"Ms Folbigg will get her chance to put a case before an inquiry who's a retired jurist, and that is a fairer way to go about things than me, as a politician behind closed doors, making a recommendation to the government," Mr Speakman said.
Australian Associated Press
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