The Prime Minister has received an ominous warning from the head of a blue-ribbon New South Wales Liberal Party branch, calling on him to capitulate and establish a royal commission into the banks or face the issue contributing to a "wipe-out" at the next election.

Key points: Peter McNamee wrote to PM asking him to change his mind on banking royal commission

Peter McNamee wrote to PM asking him to change his mind on banking royal commission He is the branch president in one of the safest Liberal seats in the country

He is the branch president in one of the safest Liberal seats in the country Two Government MPs would need to cross floor to pass commission of inquiry or royal commission in Parliament

The president of the Berowra Waters Liberal Party branch in Sydney, Peter McNamee, has made the impassioned plea, writing to Malcolm Turnbull to appeal for him to change his mind to avoid "deserting" those hurt by the banks who are the "backbone of our country".

"As a party, we need to immediately change tack on this issue and call an inquiry with the powers of a royal commission," Mr McNamee wrote earlier this week in the letter leaked to ABC News.

"If we don't do so, then we have completely deserted our base and forfeited our right to claim to represent these people. As well, we forfeit our legitimate right to Government."

Mr McNamee, a property developer, has been at the forefront of a campaign waged over many years against the Commonwealth Bank concerning BankWest loans that went bad, the Australian Financial Review has reported.

Two parliamentary inquiries and several court cases failed to prove the CBA acted unethically or illegally in foreclosing on the bank's clients. However, Mr McNamee's campaign has helped fuel public discontent.



While a number of Nationals have been applying pressure for a wide-ranging banking inquiry, Mr McNamee's letter shows there is also active discontent inside one of the safest Liberal seats in the country.

Labor, the Greens and most crossbenchers are in favour of holding a royal commission, but Mr Turnbull has repeatedly rejected the idea.

His Government has instead focused on other efforts to crackdown on banking practices.

The increasing pressure to hold a royal commission was raised in Cabinet discussions this week.

Mr McNamee, who has been Berowra Water branch president for 28 years, warned the Government faced being politically hobbled by its position.

"We are facing a wipe-out at the next election as a result of the poor decisions we have made," he wrote.

"The decision to abandon these thousands of business families in favour of concealing the dreadful behaviour of the banks is one of these poor decisions."

Nationals inquiry push continues

Nationals senator Barry O'Sullivan has been applying pressure for a commission of inquiry investigation, which reports to the Parliament rather than the Governor-General.

Senator O'Sullivan has released a draft bill to put to the Parliament.

In order for a commission of inquiry or a royal commission to pass the Parliament, two government MPs would need to cross the floor.

George Christensen from the Nationals has already signalled he could be one.

Last weekend Mr Christensen confirmed he had written to the Prime Minister "asking for his government to reconsider its stance on certain issues".

"I support a royal commission or commission of inquiry into the banks," he said in a statement.

Another Lower House Nationals MP, Llew O'Brien, has not ruled out supporting such an inquiry.

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