Premier Morris Iemma has reinvented his power privatisation plan just enough to resurrect it, sidelining the opposition - and parliament - in the process.
It started out looking like a disastrous day for the premier and Treasurer Michael Costa, but matters took a sharp U-turn just hours after the coalition confirmed it would vote down the enabling legislation.
It cost an estimated $500,000 to recall parliament to vote on the power proposal, but after less than an hour of discussion in the upper house, the debate was postponed - never to be resumed.
O'Farrell criticised
The premier accused Opposition Leader Barry O'Farrell of killing the sell-off for five minutes of political gain.
But Mr Iemma and Mr Costa - the architect of the original $25 billion plan - were not prepared to accept defeat in their long-running power struggle.
In September last year, Professor Anthony Owen recommended the NSW government look at privatising the electricity industry in order to have the private sector build a new baseload generator.
The generator is needed by 2014, and the only other option was for the state government to build it at a cost to taxpayers of about $15 billion.
Three months after Prof Owen's recommendation, Mr Iemma declared he would sell off the three electricity retailers and lease out the power generators.
Opposition from unions
Battle lines were immediately drawn - within Labor, between Labor and the unions, and between the political parties.
The union movement was the first to take up the anti-privatisation fight, insisting it was a bad move for power workers and consumers.
Dissident Labor MPs joined in, claiming privatisation was at odds with the party's platform.
The battle reached fever pitch at Labor's state conference in May, when Mr Iemma was heckled by rank and file members during his address.
Mr Costa was booed and jeered as he told the conference opposition to the sell-off within the party was "all about ego".
The position of the premier and treasurer was overwhelmingly rejected by ALP delegates when their proposal was defeated 702 votes to 107.
Were they humiliated? Perhaps. Deterred? Certainly not.
The next day, Mr Iemma said he would defy the party and proceed regardless.
So, it came as no surprise that when the privatisation plan was set for defeat in the upper house, Mr Iemma and Mr Costa found a way to effectively defy parliament and proceed regardless.
Plan revised
A day after saying there was no "plan B", Mr Iemma put one to cabinet, and then caucus.
His revised plan involved selling off the state's three electricity retailers, EnergyAustralia, Integral Energy and Country Energy.
It differed from the original proposal in that the power generators would remain completely under the state's control, and more importantly, it could be achieved without a vote in state parliament, thus sidelining the coalition.
The compromise, and the methods employed by the premier, are likely to further agitate the Labor MPs he has already got offside over the sell-off.
It will also anger the already irate ALP state head office, which has previously attempted to unseat Mr Iemma as premier and replace him with Emergency Services Minister Nathan Rees.
Unions NSW secretary John Robertson, who has spearheaded the anti-privatisation campaign, said that if Mr Costa and Mr Iemma proceeded, they were "effectively signing their political death warrants".
'Ultimate in arrogance'
"I would say it's the ultimate in arrogance," Mr Robertson said.
But, Mr O'Farrell is also likely to face some opposition from within his own ranks for the stance he has taken in this debate.
The business lobby warned Mr O'Farrell their relationship would be strained if he opposed privatisation, which is essentially Liberal philosophy.
Mr O'Farrell is also yet to put up any alternative to the government's plans to secure NSW's electricity past 2014.
However, political strategist Bruce Hawker said Mr Iemma's "plan B" could provide both parties with "a way out with some credibility".
"I think the new plan has a lot of merit and it is probably what should have been adopted initially," he told AAP.
He said former Queensland premier Peter Beattie pushed through the sale of his state's electricity retailers just before the last election "without a murmur of dissent".
