Unions and the State Government are at war after a last-ditch attempt to settle the bitter power privatisation dispute ended disastrously. 

Hours of negotiations at yesterday's ALP state conference fell apart when the Government accused the unions of "not only asking us to accept defeat but commit hara-kiri". 

At the heart of the dispute was a long anti-privatisation motion put to the conference by the union movement, a motion some in the Government claim was void because it was revealed too late. Delegates voted by 702 to 107 to oppose privatisation, but left the door open for Premier Morris Iemma to keep talking about the future of the energy sector. 

Mr Iemma's leadership is now under serious threat. 

Amid wild scenes Treasurer Michael Costa, the architect of the power plan, told delegates that rejecting privatisation would be a rejection of Mr Iemma. 

"In now considering the decision of the conference, the Premier will weigh up the views of 700 delegates against the future needs of 7 million people." 

In a clear challenge to Labor parliamentarians, Mr Robertson said the decision was binding on every MP and every member of the party. 

Tuesday's caucus meeting is likely to be ferocious with some MPs expecting a motion supporting the conference resolution. 

If passed, it would put the Premier at loggerheads with his own MPs. 

So? 

Power & The Passion At ALP Conference