The Premier and his treasurer, Michael Costa have been forced into a compromise after the state Opposition scuttled their original $25 billion electricity privatisation strategy.

The Bill was due to be released in the Upper House but at the eleventh hour six Labor MLCs released a statement confirming they would cross the floor. The four Greens and the Christian Democrat, Gordon Moyes also planned to block the legislation.

It would also have been defeated in the Lower House with twelve Labor MPs prepared to cross the floor to defeat the Bill.

A defiant Morris Iemma now plans to sell parts of the state’s electricity assets under a face-saving proposal that does not require Parliament’s approval.

Member for Bathurst, Gerard Martin said under this proposal the government’s retail licences would be sold to private companies.

“The sale will generate up to $4 billion for the state coffers.

“It can be done by regulation and not an Act of Parliament,” he said.

“Enabling legislation, introduced into Parliament in June, will protect the entitlements of customers and avoid prices increasing,”

“The total privatisation proposal is dead in the water,” Mr Martin said.

He said it had been alleged that treasurer, Michael Costa, threatened to withhold funds from the electorates of Labor MPs opposing the power Bill.

“The Premier said this inappropriate and assured MPs there would be no recriminations should they vote against the legislation,” he said.

Member for Orange, Russell Turner said the recall of Parliament this week developed into a farce and a complete waste of taxpayer’s money.

“As soon as the Premier realised he was given the wrong advice and did not have the numbers to pass the sell-off legislation, he withdrew the Bill.

“The Premier then used question time to infer it was the opposition who caused the sell-off to fail.

“The fact is it was his own members such as the Member for Bathurst, Gerard Martin, who indicated they would cross the floor.

“The Premier, in is desperate bid for extra money failed to realise that up to 90 per cent of voters in NSW believed our electricity generators should remain in public ownership.

“The vast majority of consumers believe the government should be responsible for running an efficient, modern power industry,” Mr Turner said.

George Souris, Member for Upper Hunter, said the recall of Parliament, specifically to get power privatisation through, was a disgrace.

“The Upper House sat for one hour and was adjourned to September 23.

“Privatisation was not voted on in either House,” he said.