A NSW Liberal politician who supports gay marriage has said he is ''grateful'' to Premier Barry O'Farrell for setting up an inquiry that yesterday cleared the way for NSW to introduce a bill to legalise same-sex marriage. ''This is what democracy is about,'' said the Liberal member for Coogee, Bruce Notley-Smith.

NSW could become the first Australian state to legalise same-sex marriage after the inquiry found NSW has the power to introduce its own law, although this was likely to be challenged in the High Court by opponents of gay marriage.

Barry O'Farrell. Credit:Alex Ellinghausen

A group of MPs from across the political spectrum have redrafted a Same Sex Marriage Bill that will be introduced in the upper house of the NSW parliament in the next session. Mr O'Farrell has promised a conscience vote on the issue, and is the first Liberal leader to do so.

Independent Sydney MP Alex Greenwich said the inquiry has ''made history''.