NSW govt may backflip on council mergers

The NSW opposition says the government is finally seeing sense on the issue of council mergers, following indications of a major backflip.

Opposition Leader Luke Foley said the Baird government's "rotten and hated" policy to forcibly amalgamate a raft of NSW councils cost the government the Orange by-election

"Finally they're seeing sense," Mr Foley told the Nine Network, which has reported that the Berejiklian government is on the brink of reversing the policy.

Nine reports that the NSW government is considering cancelling planned council mergers that are being disputed in court, and allowing ratepayers of already merged councils to vote on whether to de-amalgamate.

The plan is reportedly set to go to cabinet on Thursday or next week.

The premier's office has been contacted for comment.

On Tuesday, the new Local Government Minister Gabrielle Upton said Premier Gladys Berejiklian had indicated she wanted to "look closely" at the issue of councils.