And Ms Keneally has relied on 1994 advice from the Crown Solicitor, Ian Knight, to argue that it would be illegal because it was set up after she prorogued, or shut, Parliament two months ahead of schedule on December 22.

She has also argued that the Auditor-General, Peter Achterstraat, is the only appropriate person to review the sale, despite the likelihood that he would not report until after the state election on March 26.

The decision to prorogue Parliament, widely seen as an attempt to stymie the inquiry, has been met by a public backlash. But Ms Keneally said her ''commitment to transparency and openness'' drove the decision to face the inquiry. ''I have always said that I am confident the transactions stand up to scrutiny, and I acknowledge that this must happen before the March state election,'' she said last night.

The Premier said fresh advice from Mr Knight, which she released on Monday, vindicated the government's position. It repeated Mr Knight's earlier advice that an inquiry could not be held legally when Parliament was prorogued, despite the clerk of the Legislative Council, Lynn Lovelock, saying it could.

''While the Crown Solicitor's legal advice is abundantly clear that the committee is unconstitutional and is unable to compel witnesses, I have decided that the Treasurer and I will attend voluntarily … to answer any questions this group of MPs want to put to us,'' the Premier said.