The daughter of former New South Wales premier Neville Wran has been charged with murder after a $70 drug deal went horribly wrong.

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According to The Sydney Morning Herald, the 26-year-old – who is pleading not guilty to the murder – told police she was “numb on ice” (methylamphetamine) when she and her boyfriend allegedly stabbed Daniel John McNulty to death in the Sydney suburb of Redfern on Sunday night.

She is now one of two people charged with the 48-year-old’s death at a public housing complex.

Ms Wran’s barrister, Winton Terracini, SC, said his client would plead not guilty and would not apply for bail.

Police allege Ms Wran attended the unit in Walker Street, Redfern, with two other men, intending to meet with Mr McNulty.

A fight then broke out over $70 worth of drugs, leaving Mr McNulty dead.

Police allege that Ms Wran and her companions went to the complex with the intent of murdering Mr McNulty.

Ms Wran, who is the youngest daughter of the late premier, was arrested last night in Liverpool with her 35-year-old boyfriend, Michael Lee, and taken to Cabramatta police station.

Overnight, both were charged with murder, attempted murder and aggravated break and enter.

On Tuesday night, Lloyd Haines, 29, was also charged with murder, attempted murder, and aggravated break and enter.

A witness to the crime, Brett James Fitzgerald, 42, was also stabbed multiple times and taken to St Vincent’s Hospital, where he remains.

Police said the arrests were made after a red hatchback was found in the Sydney suburb of Waterloo.

Sources have told Fairfax media that Ms Wran had been “living on the streets” for weeks and was not carrying a single bank card or any money at the time of her arrest.

Ms Wran’s mother, Jill Wran, flew back to Sydney from Brisbane on Thursday morning and refused to comment to waiting media at the airport.

Mr Wran, who led NSW from May 1976 to July 1986, died in April.

— with ABC, AAP