The Labor party says the Liberals' decision not to contest seats vacated by Tim Owen and Andrew Cornwell, who resigned in disgrace over the corruption watchdog revelations, is a cynical manoeuvre to avoid embarrassment.
The NSW government has seven months to restore voters' trust after being walloped by the state's Independent Commission Against Corruption (ICAC), and Premier Mike Baird on Sunday said he's up to the job.
He flagged that the party will stand candidates in the vacated seats of Charlestown and Newcastle when voters head to the polls in March but will not contest the Hunter Valley by-elections.
"The people of the Hunter will have every opportunity at the state election, but in the by-election we have forfeited the right,
I strongly believe, to seek their endorsement at this time," Mr Baird told reporters on Sunday.
Liberal state director Tony Nutt called the decision not to field candidates in October "an explicit act of atonement".
NSW Labor leader John Robertson described it as an extraordinary decision.
"This denies the people of the Hunter the opportunity to send a message to this government," Mr Robertson said.
"I don't recollect ever - certainly in my time or in modern times - seeing a party that has held a seat, walking away from running candidates in a by-election.
"It's pretty extraordinary, and I think it's a demonstration of the fact that Mike Baird is raising the white flag," he said.
Mr Baird says the prospect of defeat is not the only reason his party is walking away from the by-elections.
"Of course it would have been tough (to win)," he said.
"We say to those communities: 'we understand your pain but we will come back bigger, better and stronger than ever, and we will present to you a credible platform when the state election comes around'," he said.
Nationals state director Ben Franklin has told AAP it's unlikely the party will field any candidates in the empty seats in October but that the party's executive hasn't made any decisions.
But Mr Robertson said Labor was bracing for a fight.
"This is going to be a tough by-election, and we'll be taking nothing for granted," he said.
The NSW Liberal Party has so far lost a premier, had two resignations and lost six state MPs including two sitting ministers to the crossbenches over the course of twin ICAC inquiries this year.
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