Business leaders have defended the City of Sydney's decision to proceed with New Year's Eve celebrations in the face of fierce opposition to the fireworks display due to ongoing bushfire threats.

Fire authorities on Monday evening gave the all clear for the fireworks to go ahead despite Parramatta and Campbelltown being forced to cancel their shows due to a total fire ban and severe fire danger.

Business leaders have backed the decision to proceed with Sydney's fireworks display despite the bushfire crisis gripping NSW. Credit:Dominic Lorrimer

But Sydney Business Chamber executive director Katherine O'Regan said cancelling the city's fireworks could negatively impact Sydney's global standing.

"It would be unprecedented if it weren't to go ahead. In terms of businesses this is the night of nights where they can do a significant trade," Ms O'Regan said.