Premier Mike Baird is standing firm behind his decision to ban greyhound racing in NSW from July 2017 as pressure ramps up from within his own ranks to dump the policy.
Nationals MP Andrew Fraser has issued a letter to the premier, his deputy Troy Grant and the Coalition cabinet arguing that the ban has completely reversed the state government's political fortunes.
The upcoming by-election in the usually safe Nationals seat of Orange "at this stage appears unwinnable", the leaked email says.
"I believe that the greyhound legislation has been the catalyst which put us in this position," Mr Fraser wrote.
The Coffs Harbour MP has urged cabinet to abandon the ban and instead adopt a reform plan being put forward by the greyhound industry.
The alternative plan would reduce the number of races, dogs and tracks, as well as "ensure any person in the industry who wastes a dog inhumanely or live baits is subject to a very large fine, a jail term and a life ban".
The government has previously acknowledged it is facing a tough fight to retain the western NSW seat on November 12, which is held by a 21.6 per cent margin.
But a spokesman for Mr Baird on Friday said the premier remains "100 per cent behind the ban".
The division within the Coalition comes amid reports greyhound owners could receive a payment of up to $1500 per dog under a compensation package being considered for the industry once the sport is banned from July 1 next year.
People will reportedly get more for racing dogs than retired dogs under the $30 million plan.
A spokesman for the premier would not confirm the reports on Friday and told AAP the government is still awaiting advice from the taskforce charged with managing the industry's shutdown.
Mr Baird announced his decision in July to ban the practice after a special commission of inquiry report found widespread evidence of animal cruelty within the industry.
