Planned changes to the way Airbnb is regulated in NSW have been parked with the state government deferring internal debate on the issue.
The government has for months grappled with how to balance the protection of neighbours and the ability to profit from providing short-term accommodation.
The coalition party room was on Tuesday scheduled to discuss a package of reforms put to cabinet last week, including a potential cap on the number of days a home owner can rent out their property to prevent apartment blocks turning into "quasi-hotels".
But AAP understands debate on the contentious topic was deferred after backbenchers raised concerns with what was going to be announced.
It is understood at least six government MPs spoke out against the plan - forcing a deferral.
An announcement by ministers Matt Kean and Anthony Roberts planned for after the meeting was cancelled with less than an hour's notice.
Deputy opposition leader Michael Daley said the delay was more serious than a deferred debate, suggesting some MPs had voiced their disapproval to the planned policy during the discussion.
"(Premier Gladys Berejiklian) has been rolled by her own backbench," Mr Daley told reporters.
One area of contention is understood to be surrounding whether the government places a cap on how many days a year a property can be used as an Airbnb.
Airbnb hopes the NSW government follows regulations implemented in other states, including Tasmania and South Australia, which they believe have implemented fair and progressive rules.
There are no caps in either state.
The company has argued it pumps nearly $1 billion into the NSW economy and supports more than 7300 jobs.
"In a single year, Airbnb creates more local jobs in NSW than Snowy Hydro 2.0 will," head of public policy Brent Thomas said in a statement on Tuesday.
Owners Corporation Network spokesman Stephen Goddard said he hopes the government gives a voice to strata corporations.
"Short-term tenants bring extra wear and tear on lifts, pools, gyms and common laundries and we should be able to vote on if we'll wear those costs in return for extra rental potential," he said.
