NSW Nationals leader John Barilaro has backed down on his threat to stop supporting government legislation and says his MPs will not move to the crossbench.

Mr Barilaro’s backdown came after an emergency meeting of his Nationals MPs on Friday, and a brief follow-up meeting with Premier Gladys Berejiklian.

It is understood Ms Berejiklian asked Mr Barilaro, who is also the NSW deputy premier, to guarantee that the Nationals would stay in the Coalition and he agreed.

She also sought an agreement that National MPs would support the government on legislation, to which he also agreed.

The dramatic backdown came after Mr Barilaro had threatened to blow up the NSW government over the state’s disputed koala protection policy.

On Thursday, Mr Barilaro blindsided Ms Berejiklian, announcing his MPs would abstain from voting on Coalition bills as they fought changes to the protection plan.

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, which will restrict the clearing of land.

The move effectively robbed the government of its majority and provoked a stern response from the Premier.

“It is not possible to be the deputy premier or a minister of the Crown and sit on the crossbench,” she said in a terse statement on Thursday.

“If required, I will attend Government House tomorrow and swear in a new ministry,” she said.

In a joint media statement on Friday, 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.

Tweet from @JodiMcKayMP

Later on Friday, Mr Barilaro said the assurance that the matter would be discussed at cabinet was a “victory”.

“Nothing’s changed from yesterday … 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,” Mr Barilaro told 2GB radio.

“We’ve got the win there today.”

However, it is understood 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.

Labor leader Jodi McKay called Mr Barilaro’s backdown “humiliating” and said his position as Nationals leader and deputy premier was untenable.

“The National Party can’t continue to back him, not with what we have seen in the last couple of days. His position is completely untenable,” she said.

Ms McKay argued Mr Barilaro had acted out “too many times” and the Premier should have pulled him into line earlier.

She said 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.

-with AAP