Labor is preparing to use national executive powers to install Luke Foley as the candidate for Auburn at next year's state election as he firms as likely winner in a leadership ballot.
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The move – to allow Mr Foley to move from the upper house to the lower house – would also end the bitter preselection battle in Auburn where sitting MP Barbara Perry has accused local councillor Hicham Zraika of branch stacking.
If Mr Foley is installed as the candidate in Auburn, it is understood Cr Zraika could be given a winnable spot on the upper house ticket as part of the deal.
A caucus meeting will be held on January 5 to elect a new leader after John Robertson resigned last week over revelations he had signed a letter of request for Lindt Cafe gunman Man Haron Monis in 2011 as his local MP.
Mr Foley, a leading member of the minority left faction, has yet to announce if he will contest the ballot, but some party sources believe it is increasingly likely that he will do so.
Shadow Treasurer Michael Daley and police spokesman Steve Whan – both right faction MPs – have confirmed they intend to stand. Mr Daley is the member for Maroubra and Mr Whan, an upper house MP, is seeking election to the seat of Monaro.
Acting Labor leader Linda Burney, also from the left, is considering her position but is unlikely to run against Mr Foley.
Mr Foley has the strong backing of ALP head office in Sussex Street, including NSW Labor general secretary Jamie Clements.
The numbers appear to favour Mr Foley, should he decide to contest.
There are 22 right faction MPs in the ALP caucus and 14 MPs from the left. Cessnock MP Clayton Barr is not aligned with either faction.
It is understood the broader left faction – including the "soft" left sub-faction of which Mr Foley is not a member – is backing Mr Foley. This means that in a ballot Mr Foley would only need five right faction votes to become leader.
Party sources suggested that on current indications of support, this would easily be the case.
If Mr Foley agrees to be parachuted into Auburn, it would allow Mr Clements to solve a potentially embarrassing problem emerging in the western Sydney seat.
Ms Perry has taken her branch stacking allegations against Cr Zraika – which he denies – to the party's internal Review Tribunal after they were dismissed by the lower tier Internal Appeals Tribunal.
Last week the Review Tribunal hearings were adjourned until January 21.
Usually, this delay would mean Labor cannot complete the preselection until after the tribunal's findings are delivered.
However, using national executive powers would allow Labor to cancel the preselection and immediately endorse Mr Foley as Labor's Auburn candidate.
Labor holds Auburn by a margin of 7.2 per cent.
In September, Mr Clements controversially referred preselection of candidates in the seats of Lakemba, Shellharbour and Gosford to the national executive to avoid holding rank and file votes.
The move installed celebrated Punchbowl Boys High principal Jihad Dib as Labor's candidate in Lakemba and ensured sitting MP Anna Watson will be the candidate in Shellharbour and Kathy Smith will contest in Gosford.
