An extraordinary dummy spit from the Nationals over controversial environmental protection laws threatens to destroy the foundation of the NSW government and could even shake the federal Parliament.

NSW deputy premier and Nationals leader John Barilaro confirmed on Thursday his party colleagues would notionally split from the Liberals, no longer sitting in their joint party room and declining to support government legislation.

The Nationals will sit on the crossbench in state Parliament, in response to proposed legislation to better protect koalas.

The Liberals want to expand protections to new types of trees that are homes to koalas.

The Nationals say they are not anti-koala, but claim the laws would be untenable “green tape” in rural and regional areas, affecting land clearing, forestry and development.

Mr Barilaro’s Nationals MPs will sit on the crossbench. Photo: AAP

Mr Barilaro said his party felt “betrayed” by the Liberals, but his colleagues did not plan to relinquish their ministry positions – leading to a blistering statement from Premier Gladys Berejiklian on Thursday afternoon.

“It is not possible to be the deputy premier or a minister of the crown and sit on the crossbench … If required, I will attend Government House tomorrow and swear in a new ministry,” she said bluntly.

The ultimatum forced the NSW Nationals into an emergency partyroom meeting on Thursday night ahead of Friday’s deadline.

However Mr Barilarlo appeared by Friday morning to be softening his stance, telling Sydney’s 2GB he thought the issue could be resolved but it may take time, possibly the next few weeks.

He also claimed the threat to sit on the cross bench had been misinterpreted.

“What we said yesterday was that no one would go physically to the cross bench,” Mr Barilaro said.

“But what was turned on us because we said we won’t vote on government bills until this is resolved but we will vote on bills and motions on the regions that, effectively, the whole party’s gone to the cross bench.

“They’re not sitting on the cross bench, we are not going to the cross bench.”

On Thursday, firebrand federal Nationals MP Barnaby Joyce supported his state colleagues, saying “enough is enough” and claiming the Liberals offered his party “crumbs off the table”.

Liberal MP Catherine Cusack called Mr Barilaro’s behaviour “bullying”, saying she was “stunned and bewildered”.

Why koalas?

A storm over the koala legislation – the State Environmental Planning Policy (Koala Habitat Protection), or SEPP – has been brewing for some time, but came to an unexpected head on Thursday when Mr Barilaro effectively ripped the Nationals out of the Coalition.

“The National Party wants to see a thriving koala population in NSW, even a doubling of the population, but this SEPP does not achieve this. It is a blunt instrument to make city-centric law makers feel good about themselves,” Mr Barilaro said.

https://twitter.com/JohnBarilaroMP/status/1303892948396908545

Federal Nationals MP Dr David Gillespie represents the seat of Lyne in northern NSW.

Just across the border, in the neighbouring electorate of Cowper, lies the famous Port Macquarie koala hospital.

Dr Gillespie told The New Daily he supported protecting koalas, but that the SEPP went too far.

“This has been bubbling along for a year or more. It’s too much over the top,” he said.

“Everyone likes koalas, but the SEPP won’t do anything but tangle up farmers without compensation, limit development of agriculture, stymie residential development, and make private forestry pretty much impossible.”

Dr Gillespie said the political brouhaha was a matter for state colleagues but claimed they had wanted compromise for some time.

“The NSW Nationals have been trying to solve this behind closed doors, but this is a line in the sand and I support them,” he said.

“They’ve been ignored. Enough is enough.”

A youngster recovers at the Port Macquarie Koala Hospital. Photo: Getty

In a statement to The New Daily, deputy Prime Minister and federal Nationals leader Michael McCormack said it was a matter for the state government.

“The Nationals at every level of government will always stand up for farmers and the interests of our regional and rural communities,” he said.

The New Daily contacted all federal Nationals MPs from NSW for comment. The rest declined to speak or did not return calls.

Other federal Nationals sources told The New Daily that people “in the city don’t understand” the effects the proposed laws would have – claiming the state Coalition had been at “breaking point” for some time.

Speaking on ABC’s Afternoon Briefing program, Mr Joyce backed Mr Barilaro.

“We are sick and tired and it is the straw that broke the camel’s back,” he said.

“I am glad they are not folding. You are not treating us with respect.”

Nationals ‘cannot do both’

Beyond embarrassment and unnecessary distraction in the midst of a pandemic, it’s unclear what long-term damage will be dealt to the Coalition agreement – at a state or even federal level.

Ms Berejiklian has given the Nationals an ultimatum for 9am on Friday, to choose whether to remain on the crossbench or keep their ministries – saying “they cannot do both”.

Ms Berejiklian set a 9am ultimatum. Photo: AAP

Mr Joyce, who has been seen as agitating to regain the federal leadership from Mr McCormack, resisted criticising the current leader on the ABC – sharing a typical folksy idiom in saying “I will not tell any cook how to make the cake”.

Considering the SEPP being firmly a state-specific issue, it’s unlikely the legislation itself bleeds into becoming a national stoush or undermining the federal Coalition agreement.

But the fracturing of the NSW Nationals under the leadership of Mr Barilaro, who has toyed with a federal switch and has been seen as a potential future leader in Canberra, will be a test for Mr McCormack.

Who of the Liberals and Nationals blinks first, says University of NSW constitutional expert Professor George Williams, will decide how this plays out.

Speaking to The New Daily, Professor Williams said he couldn’t see how the Nats could stay on the crossbench while retaining their ministries, theorising that one side will have to back down.

“Being a minister, and in cabinet in particular, means being part of a government and supporting legislation. You can’t have it both ways. It just doesn’t work,” he said.

“People resign all the time when they disagree with a position, but I’m not aware of a position when they can’t agree but want to keep ministerial positions.”

Professor Williams said the issue was a “massive distraction, particularly in the midst of a pandemic” and guessed the issue would be resolved quickly.

“It’s possible there will be compromise on the legislation. It depends how firm the Nationals stay,” he said.