Premier Mike Baird is being urged to put the question of power privatisation to a referendum amid a warning that simply taking the policy to an election ''is not a mandate'' - even if the government were to win.
As tensions rise before Nationals and Liberal MPs meet on Tuesday to thrash out the issue in their respective party rooms, Monaro MP John Barilaro, who is parliamentary secretary for small business and regional development, has declared a referendum is the best way to test support.
''I think if you genuinely want a mandate from the voters it should be a referendum question,'' Mr Barilaro said. ''The reality is this government, on the work it's done, deserves to be re-elected. But I don't believe losing between 10 and 20 seats is a mandate. A referendum will give us a true picture of where the voters stand on this.''
Mr Baird and Nationals leader Andrew Stoner are expected to propose the 99-year lease of 49 per cent of the state-owned network businesses which own the electricity ''poles and wires''.
Mr Baird has said that if the party rooms agree, the government could seek a mandate for the sale at the March 2015 election.
But on Sunday Mr Barilaro said as parliamentary secretary he has concerns about the impact on small business of potential price rises following a privatisation and also its effect on service reliability in regional communities.
He said the idea of a referendum on power privatisation has previously been discussed among Nationals MPs. Mr Barilaro also believed that MPs had not received enough information on the potential ramifications of privatisation.
''We, as elected members, need to make an informed decision,'' he said. ''We have no information around job protection, prices and service delivery for regional communities.''
Last week Mr Barilaro distributed to Nationals MPs a ''briefing note'' on the issue.
The document questions claims by the government that following privatisation in Victoria consumers enjoyed lower prices. It quotes a report by the Australian Energy Regulator which states prices in NSW and Victoria are the same, despite Victoria using cheaper brown coal, its network being a quarter of the size and having had less investment.
Mr Barilaro's call for a referendum follows last week's declaration by Education Minister Adrian Piccoli, who is the member for Murrumbidgee, that he is opposed to the sale of the poles and wires in regional communities.
Other Nationals MPs, including former local government minister Don Page, Coffs Harbour MP Andrew Fraser and Murray Darling MP John Williams have also voiced their strong concerns.
It is anticipated that the 49 per cent privatisation could exclude Essential Energy and possibly Transgrid - both of which have large footprints in regional and rural electorates - in order to shore up support from Nationals MPs.
Mr Baird and Mr Stoner are also believed to be considering offering ''price guarantees''.
One option believed to be under consideration is writing into lease contracts a provision guaranteeing that private owners would not pass on to retailers the full amount of regulated network price increases.
Under such a model the new owners could be asked to agree to increasing prices by 1 per cent less than they are allowed by the energy market regulator. The theory is that this would foster competition among retail electricity businesses by giving them the ability to pass on the savings to customers.