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Mike Baird set to be next NSW Premier

Sydney Morning Herald State Political Editor Sean Nicholls says Gladys Berejiklian will withdraw from the Liberal leadership race on Thursday morning, leaving Mike Baird to become leader and NSW Premier unopposed.

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A deal struck between Mike Baird and Gladys Berejiklian to become leader and deputy leader of the NSW Liberals is threatening to spark a factional brawl by outraging the party's right wing, which is united for the first time in years in opposition to the move.

Mr Baird is set to become premier at a partyroom meeting at 3pm after Ms Berejiklian, his nearest leadership rival, agreed not to contest the leadership following Barry O'Farrell's resignation on Wednesday.

A deal between Mike Baird and Gladys Berejiklian threatens to start a factional brawl.

A deal between Mike Baird and Gladys Berejiklian threatens to start a factional brawl. Photo: Rob Homer

Ms Berejiklian has confirmed she will contest a ballot for the position of deputy Liberal leader.

But the prospect of a Liberal leader and deputy from the left faction has outraged the right, which believed a ballot for the leadership would be held in which they could offer their support to Mr Baird.

This would allow them to enter into discussions about better representation in cabinet.

Premier deal: Gladys Berejiklian and Mike Baird.

Premier deal: Gladys Berejiklian and Mike Baird. Photo: Marco Del Grande

The right has been split into three sub factions: the centre right, the hard right and the "conservatives" - a grouping led by Liberal Party whip Jai Rowell and parliamentary secretary Matthew Mason-Cox.

In recent years, the centre right and conservatives have been in a loose alliance with the left for the purposes of preselections.

However, a right-wing source said the deal between Mr Baird and Ms Berejiklian was totally unacceptable to all of the right-wing sub factions, whose members felt they were having the arrangement imposed upon them.

Prue Goward  will contest the deputy leadership.

Prue Goward has pulled out of the contest for the deputy leadership. Photo: Britta Campion

"This has reunited the right for the first time in years," the source said, adding that this view had been firmly put to Mr Baird.

The right intended to run Energy Minister Anthony Roberts against Ms Berejiklian in the deputy leadership ballot but just before the ballot, Mr Roberts announced he would not stand.

There was strong and wide support among my parliamentary colleagues for me to nominate today," Mr Roberts said.

Sealed his own fate: Barry O'Farrell.

Resigned: Barry O'Farrell. Photo: Anthony Johnson

"My decision to not proceed to nominate underscores the strength and unity of the NSW Liberals.

"I believe Mike Baird and Gladys Berejiklian will make a terrific leadership team for the NSW Liberal Party and I will be strongly supporting them."

Community services minister Pru Goward, aligned with the centre right, had told colleagues she intended to run for the deputy leadership but has now pulled out.

"After discussions with my colleagues, including the Treasurer, Mike Baird, and the Transport Minister, Gladys Berejiklian, I have decided not to nominate for the position of Deputy Leader of the Liberal Party in this afternoon's ballot," she said in a statement.

"This decision has not been taken lightly, however my primary focus is the unity of the NSW Liberal Party, and the delivery of a stable, competent government for the people of NSW.

"My commitment is to work closely with the leadership team elected this afternoon, to ensure the good work of the NSW Liberal and Nationals government continues."

Senior members of the right faction are lobbying Mr Baird to agree to better representation in cabinet, including "advancement" for MPs including Mr Rowell, Mr Mason-Cox, Baulkham Hills MP David Elliott, Castle Hill MP Dominic Perrottet, Camden MP Chris Paterson and Charlestown MP Andrew Cornwall.

The right also wants Riverstone MP Kevin Conolly considered for deputy whip.

"We've been ignored for the past three years," a senior right faction source said.

"Quite frankly, it's been advancement more based on the relationships with the Premier [Barry O'Farrell] than merit selection. We have simply had enough. It's time the party was represented across the board."