The Liberal Party met on Tuesday morning after their junior coalition partner initially dismissed the removal of upper-house MP Wes Fang from the shadow ministry for publicly lambasting opposition leader Mark Speakman.
Mr Fang accused him of "slinking" into his home town of Wagga Wagga and "pretending" to care about the Riverina in a social media post.
The Nationals hit back at the MP's removal, claiming Liberals did not have the power to sack their members.
A Nationals MP accused opposition leader Mark Speakman of "slinking" into Wagga Wagga. (Dean Lewins/AAP PHOTOS)
Mr Fang's portfolio as shadow assistant minister for police and emergency services was officially removed from the NSW parliament website on Monday.
A joint statement from Mr Speakman and NSW Nationals leader Dugald Saunders said both parties had reaffirmed their commitment to the coalition.
They confirmed Mr Fang's sacking from his posts.
"We remain focused on working together to hold the Minns Labor government to account after it handed down the highest-taxing budget in NSW history with no extra cost-of-living relief for families," the party leaders said.
"Our job and our common objective are to hold this bad government to account and to offer a strong alternative."
Liberal Party MPs were said to be seriously contemplating blowing up the coalition agreement if the Nationals did not accept the sacking.
Charles Sturt University political scientist Dominic O'Sullivan warned it was in both parties' interests to settle their differences quickly before larger sections of the public are put off by their in-fighting.
"Whether Wes Fang is or isn't on the coalition front bench makes no difference to the cost of living for anybody, and that is how voters will probably judge it," he told AAP.
"At this stage, I suspect nobody's noticed ... if the coalition agreement is terminated, that means we do have an ongoing dispute on our hands, because it's highly unlikely the Liberals would gain the numbers at an election to govern on their own."
The fracas was sparked by a controversial post by Mr Fang which accused Mr Speakman of behaving in an "underhanded" way by not informing him he was coming to Wagga Wagga on Wednesday.
"So ... the leader of the NSW Liberals Mark Speakman, slinks into #WaggaWagga, pretending like the Libs actually care about the Riverina," Mr Fang's post read.
"Did he ask the 'Coalition' member who lives in Wagga Wagga and is apparently part of his 'team' to have an in-depth discussion of Wagga Wagga issues?
"No. In fact, he didn't even have the courtesy to let me know he was coming."
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