The Liberal party will split unless the looming New South Wales convention on preselection rules allows ordinary members to vote for candidates, former party president candidate John Ruddick has warned.

Guardian Australia has confirmed Cory Bernardi will host a meeting in Sydney less than a week after the Liberal convention to allow his Australian Conservatives party to potentially capitalise on disaffected members.

It is understood Bernardi’s event, on 28 July, was sold out within days, having reached a venue capacity of 450 attendees. Australian Conservatives already has 4,000 members signed up in NSW out of a total party national membership base of 12,000.

Ruddick, a former candidate for Liberal party president, warned that if reforms contained in the Warringah motion – from Tony Abbott’s home branch – were rejected, its supporters would leave the party. Ruddick quit the party, calling for plebiscites and membership-wide leadership ballots in 2015.

“This is the grand final,” Ruddick told Guardian Australia. “If simple democratic reform embodied in the Warringah motion is rejected or watered down, I promise there will be a historic split in the Liberal party. The lobbyists can have the party logo, we’ll take 80% of the party.”

NSW remains one of only two state divisions of the Liberal party that do not routinely allow each party member a vote on preselections. Opponents of plebiscites say the change will allow branch stacking. Currently, preselections are voted on by a much smaller group of party delegates.

The convention at Rosehill racecourse at the weekend promises to spark heated debate over the future of the party and by extension its leadership, with 1,500 members attending following the close of registrations last week.

Liberal sources confirmed that supporters of the Warringah motion had paid for some 20-something “hardship” registrations for members who wanted to attend but could not afford it. The convention registration allows any members to pay for other members to attend the meeting – opening the way for supporters and opponents of reform to stack the meeting.

The Liberal party futures convention arose from a push at the party’s last annual general meeting to support the Warringah motion based on the Howard recommendations. Three years ago John Howard’s party reform report recommended a plebiscite system for choosing candidates in the lower houses of the NSW and federal parliament.

Ruddick and Abbott’s federal electorate conference president, Walter Villatora have long campaigned for reforms reflected in the Warringah motion. While Abbott commissioned the Howard report, he did not act on it as prime minister, but he has taken up the issue since he was dumped as leader.

As a result and combined with the former prime minister’s constant attacks on Malcolm Turnbull, the push for reform has been used by some as a proxy leadership war. While Turnbull has said in the past he supported reform, the NSW division is controlled by moderate members who generally support Turnbull over Abbott.

But other high-profile members, including the assistant cities minister, Angus Taylor, and the retired major general Jim Molan, have also pushed for change. Weeks ago, Taylor urged a reform convention not to turn the process into “a proxy war for other issues”.

“It is not about conservatives versus progressives,” Taylor said. “We are the trustees of two great philosophical traditions in this party – conservatism and liberalism, [Edmund] Burke and [John Stuart] Mill.

“And it is not about Malcolm Turnbull versus Tony Abbott. This issue is too important for the future of our party to be seen through the lens of personality.”

Even if the Warringah motion passes, it is not binding on the NSW division and would need approval from the state executive, which has resisted the push for plebiscites to date.