Plans for Sydney's New Year's Eve fireworks are forging ahead despite reports the display could be cancelled if catastrophic weather conditions are declared.

The City of Sydney's famous celebrations are expected to attract one million people to the harbour foreshore and generate $130 million for the NSW economy.

Temperatures around the state are expected to peak on Tuesday, with forecasts of more than 40C across western Sydney and in regional NSW.

Some communities have decided to cancel or postpone their fireworks displays, including Armidale in the state's northern tablelands and Huskisson on the state's south coast.

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City of Sydney Lord Mayor Clover Moore previously said if there was a total fire ban on New Year's Eve the council "will do what we need to do".

An internal email from the Northern Beaches Council said Sydney's fireworks would only be cancelled in the case of catastrophic weather, The Daily Telegraph reported on Sunday.

The decision was made at a meeting of local councils, government and the Rural Fire Service prior to Christmas, the 27 December email informed councillors.

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"Staff are currently planning for the emergency shutdown of events if weather conditions dictate it." the email signed by the council's executive manager of community engagement Kath McKenzie said.

However, the City of Sydney says the fireworks are going ahead as planned.

"The City of Sydney works closely with NSW government agencies such as the Department of Premier and Cabinet, NSW Health, NSW Police and Fire and Rescue NSW in the lead-up to the event," a City of Sydney spokesman said in a statement on Sunday.

"If a total fire ban is declared, we will continue to liaise with NSW Government agencies and the NSW Rural Fire Service to determine the safest way to proceed with the event."

RFS Commissioner Shane Fitzsimmons has previously said while firefighters and communities would be challenged, the RFS was not expecting a return of catastrophic conditions on Tuesday.

In the event of high winds, the City of Sydney will assess the conditions along with its fireworks director Fortunato Foti.

"We encourage all visitors to Sydney for New Year's Eve to be mindful of the conditions and how they could impact on their health," the spokesman said.

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More than a quarter of a million people signed a petition calling for the fireworks to be scrapped, with the funding to be redirected to NSW drought and bushfire relief.

"Cancelling the event would seriously hurt Sydney businesses," the City of Sydney spokesman said.

"It would also ruin plans for tens of thousands of people from across the country and overseas who have booked flights, hotels and restaurants for New Year's Eve."

Most of the event's budget, which is mainly used for crowd safety and cleaning measures, has already been spent.

"We appreciate the concerns people have around holding the Sydney New Year's Eve fireworks while large parts of Australia deal with bushfires and drought. And we've heard the calls from people to cancel the event and donate the budget to relief efforts," the spokesman said.

"But we can't cancel the New Year's Eve celebrations. It would have little practical benefit for affected communities."

with AAP...