NSW Deputy Premier John Barilaro on Thursday said Nationals MPs would "effectively" move to the crossbench and block government legislation unless environmental planning rules were changed.

"It was never an empty threat...we were prepared to sit on the crossbench. However, as there is an agreement and the national party has had a win, I am prepared to continue voting with the government," Mr Fang said.

"Given that we have had a win on this, I will continue being a member of the government."

Following a meeting with NSW Premier Gladys Berejiklian on Friday morning, after being told that Nationals ministers would be sacked from their portfolios if they left the Coalition, Mr Barilaro reportedly withdrew his threat.

Mr Barilaro and Ms Berejiklian jointly issued a short statement just after midday following the meeting.

"Following a meeting this morning between the Premier and Deputy Premier, the NSW Liberal and Nationals Coalition remains in place," the statement said.

"This includes a commitment to supporting Cabinet conventions and processes.

"This matter will be dealt with at an upcoming Cabinet meeting."

The Koala Habitat Protection clause of the State Environmental Planning Policy was approved by government ministers in December and came into effect in March, but has now been labelled by the Nationals as a threat to farmers and regional development.

Mr Fang said the issue had never been to Cabinet and was "never on the agenda for Cabinet" before the National Party spoke out.

"What we have done is forced the hand and he have got agreement that this issue will be debated at a Cabinet meeting in the very near future," he said.

Mr Fang said Nationals ministers would now be able to "interrogate and inquire with a level of detail and present counterpoints" in a Cabinet meeting as soon as the required submissions had been prepared.

"We have indicated quite clearly what we believe is a set of policy positions that will have the same protections for koala populations while not being a handbrake on landowners and farmers for continuing what they do," he said.

Nationals members, including Mr Fang, joined with Mr Barilaro on Thursday to withdraw support for their Liberal Party Coalition partner until they could get changes to the State Environmental Planning Policy in favour of landowners.

Labor opposition leader Jodi Mckay said she would move a motion of no confidence in the government.

"The Deputy Premier's position is untenable and the Premier has allowed this to happen," she said.

Mr Barilaro's threat to stop supporting government legislation, followed by retreat the next day, has led to speculation about his future as Deputy Premier and NSW Nationals leader.

Mr Fang said the no-confidence motion was "a half-baked stunt" that was "not going to achieve anything".

"We have had two meetings in the past 24 hours; John has 100 per cent support, unwavering, of the whole party room," Mr Fang.

"Our membership can be very proud of John and the leadership team."

Riverina MP, Deputy Prime Minister and Nationals federal leader Michael McCormack said land rights were important but politicians also needed to be focused on outcomes rather than squabbling.

"Whilst this is a matter for the NSW state government given the decision relates to a State Environmental Planning Policy and I appreciate this has been a difficult time of negotiation, the Nationals at every level of government will always stand up for farmers and the interests of our regional and rural communities," Mr McCormack said.

"It is important for people to understand that farmers need to have the rights to do on their property what they need to do.

"I hope that what goes on from here can be discussed where it should have been all along and that is behind closed doors.

"People do not want to see politicians squabbling - particularly at this time with the COVID-19 pandemic and the health and economic fallout as a result of it - people want to know their politicians are getting along and focusing on outcomes."