Former Labor Party president Warren Mundine is expected to be installed as the Liberal candidate for the federal seat of Gilmore at the behest of Prime Minister Scott Morrison.

Key points: ABC election analyst Antony Green said Mr Mundine was a "brave choice" for Gilmore

ABC election analyst Antony Green said Mr Mundine was a "brave choice" for Gilmore The Liberal Party state executive has defended its decision to no longer endorse Grant Shultz

The Liberal Party state executive has defended its decision to no longer endorse Grant Shultz Mr Mundine was a member of the Labor Party for two decades before quitting in 2012

The decision has left the already pre-selected candidate Grant Schultz outraged, and he blasted the party for being undemocratic.



"I cannot be a member of a party that does not support democracy or act with integrity," Mr Schultz said.

"The Prime Minister has stated that he believes in a fair go.

"He has not given me that."

Mr Schultz has resigned from the Liberal Party and will now run as an independent for Gilmore.

Liberal Party members in the seat had preselected Mr Schultz eight months ago to replace sitting member Ann Sudmalis, who is quitting politics.

But in a highly unusual move, the party's state executive intervened and voted to block Mr Schultz's candidacy.

They will instead endorse a motion to parachute the Prime Minister's preferred candidate, Mr Mundine, into the seat.

Mr Mundine is not a member of the Liberal Party but the usual waiting period was most likely waived so that his membership application could be processed yesterday.

It is likely Mr Mundine will face a wide field of opponents including Mr Schultz and former New South Wales MP Katrina Hodgkinson who is weighing up whether to run for the Nationals.

Ms Sudmalis held the seat on a 0.7 per cent margin — or about 1,500 votes — at the 2016 election.

Gilmore covers an area from Kiama to Tuross Head on the NSW south coast.

Liberal sources said the seat was a "complete write-off" under Ms Sudmalis but believe it could be in play with a candidate like Mr Mundine who has a national profile.

Mr Mundine was the chairman of the Indigenous Advisory Council. ( Supplied: Warren Mundine )

NSW Liberal president Philip Ruddock has defended the intervention from party headquarters, arguing the circumstances in Gilmore were unusual.

"Mr Schultz nominated against a sitting member who later withdrew, and given these circumstances, the party has elected to not proceed with the endorsement," he said.

"The party should be able to consider the best candidate to represent voters, their aspirations and concerns in each community."

Mr Morrison would not comment on the situation in Gilmore, but described Mr Mundine as a "top bloke".

"When I have more to say about our candidate in Gilmore, I will say it then," he said.

"I think Warren Mundine's got a lot to offer and he's already been offering quite a bit. I've been a friend of Warren's for some time."

Federal Aged Care Minister Ken Wyatt said he hoped this opportunity for Mr Mundine was a step toward more Indigenous representation.

"The more Indigenous people we have within the Parliament who are preselected and elected on merit, is a great way to demonstrate the capability and capacity of individuals to take that journey into our decision-making legislative authority," he said.

Shorten attacks Mundine's support of nuclear power

ABC election analyst Antony Green said it would still be difficult for the Government to retain the seat when a federal vote is held later this year.

"The margin is much lower than the swings that have reported in opinion polls for several months," he said.

"It's the sort of regional seat where personal vote matters.

"Mr Mundine is a brave choice."

Raised in northern New South Wales, Mr Mundine is known for his advocacy on Aboriginal and Torres Strait Islander issues.

In 2006 he became the first Indigenous president of the Australian Labor Party and once had his eyes set on the Senate seat that eventually went to former NSW premier Bob Carr.

The high-profile businessman quit the Labor Party in 2012 after 20 years, saying it was "no longer the party he joined".

He was appointed as the chairman of the Abbott government's Indigenous Advisory Council the following year before the council was dissolved by Malcolm Turnbull in 2017.

Mr Mundine became an outspoken critic of Mr Turnbull after last year's leadership spill. ( Pantera Press )

When stories began circulating last year that Mr Mundine was being sounded out for the seat, Federal Opposition Leader Bill Shorten accused him of "looking elsewhere" because he "couldn't get a seat in the Labor Party".

Earlier on Tuesday, Mr Shorten said Mr Mundine was free to run for whichever party he chose.

"But I do make this point about the seat of Gilmore — the Liberal Party replaced a woman with a man and a man who wants to put nuclear reactors into Australia, including Jervis Bay," he said.

"I just don't think they get how everyday Australians think."

Mr Mundine is a strong supporter of nuclear power and had previously said there were a number of different places where a future plant could go.

Since Mr Morrison took over from Mr Turnbull in last year's leadership coup, Mr Mundine became an outspoken critic of Mr Turnbull and a vocal supporter of Mr Morrison's policies.

The ABC understands the deal to parachute Mr Mundine into Gilmore was driven by the Prime Minister's centre-right faction, but agreed to by the dominant moderate faction in a cross-factional deal.

Ms Sudmalis announced she would step down from the seat of Gilmore in September before she launched an extraordinary spray at NSW state Liberal MP Gareth Ward, who she accused of bullying her.

Mr Ward denied the claim.