"The Treasurer has my full confidence as deputy leader." Mr Williams threatened the drastic action via a public statement, following an early morning phone call between the pair in which Mr Perrottet informed Mr Williams of his intentions to take his seat. Mr Williams said the Treasurer's role as Liberal deputy leader was "untenable" - a view that he claimed was "widely shared". Ray Williams has issued a public ultimatum to Dominic Perrottet. Credit:Wolter Peeters "I have also advised Dominic that if he fails to step down from the position of Deputy Liberal Leader for the good of the Government I will have no other alternative but to move a motion to spill this position in the party room next Tuesday morning," Mr Williams said in his statement.

Mr Williams would not confirm to the Herald whether he would proceed with the spill motion following the Premier's comments. If he proceeds, Mr Williams, who is from the centre right faction, is likely to fail at the first hurdle if an agreement is struck between the moderate faction and the hard right to defeat the spill motion. It is understood Corrections Minister David Elliott, who is also from the centre right faction, has told the Premier he will not support the spill motion. However, the Herald understands there is considerable anger among some MPs, particularly some of those in marginal seats who feel Mr Perrottet's bid for a safer seat was galling. "Dom had six months to tell Ray Williams of his intentions and he left it until the morning the nominations closed. That was disgraceful," a senior Liberal said.

Mr Perrottet, who is from the hard right faction, entered politics as the member for Castle Hill in 2011. But a boundary redistribution before the 2015 election resulted in him swapping seats with Mr Williams, who then held Hawkesbury. Explaining his decision to recontest his old seat, Mr Perrottet - who lives 40 kilometres from the Hawkesbury electorate - said he was concerned he would be "unable to give the people of Hawkesbury the level of representation they deserve" due to his increased family commitments and his duties as Treasurer. The sprawling Hawkesbury electorate covers an area about 30 times the size of the Castle Hill electorate. The Liberals hold Hawkesbury by a margin of 17.8 per cent and Castle Hill by 29.4 per cent. In a sign of unabashed confidence, Mr Perrottet thanked Mr Williams' for his service and "his dedication over many years" in a statement on Friday. Mr Williams also proposed that both ministers resign from cabinet while "this battle rages over the next three months" so as to "give our colleagues clean air". Mr Perrottet refused.

"Speaking with many of my colleagues in the last 24 hours I believe there is deep concern across the Government at the potential for this contest to cause ongoing instability," Mr Williams said. The bitter public stoush is embarrassing for Ms Berejiklian, as it comes just one month after Malcolm Turnbull's prime ministership was toppled amid brutal factional infighting among the federal Liberal Party. Loading Only a fortnight ago, Ms Berejiklian conceded voters were "angry and disappointed with politicians talking among themselves and not focusing on the community", as she apologised for the Liberals losing the once-safe seat of Wagga Wagga in the September byelection. Labor leader Luke Foley was quick to capitalise on the chaos, accusing the Premier of losing control of her cabinet and said the Liberals had learnt no lessons from the Turnbull government's destruction.