Moses Obeid initially denied ever seeing a document titled ''Heads of Agreement - Australian Water'', which was dated November 2010. But the document, which would deliver to an Obeid family trust a third of the company for $3 million, was signed by him, his brothers Paul and Eddie jnr, and their close associate Nick Di Girolamo, the head of Australian Water Holdings, who has close ties to the Liberal Party.

Last January the O'Farrell government signed a 25-year agreement with the company - without going to tender - giving it the right to roll out all of the $500 million worth of water infrastructure still needed in the north-west growth centre.

A Herald investigation has revealed that by the time the secret Obeid deal was signed, Eddie Obeid had extensively lobbied his colleagues to assist the company, which wanted the government to agree to sell it all of Sydney Water's operations in the north-west. It has also confirmed that prior to the 2011 election the former planning minister Tony Kelly rewrote a top-level cabinet minute to support the company's proposal even though it had been rejected by senior bureaucrats.

A government source familiar with the privatisation proposal described it as ''a complete and utter rort … the size of that work would have been billions''.

Had that proposal proceeded, the Obeids might have been sitting on a windfall as big as the coal deals now being investigated by the Independent Commission Against Corruption.