Labor sources say party boss Murnain's career 'all but over' - The Age

"There is just no way she can survive this, why would Albo [federal leader Anthony Albanese] and Jodi [NSW Labor leader] allow her to stay, and they both like her," a senior MP said.

Speculation about Ms Murnain's future has been rife since Labor's failed state election campaign and the federal election loss.

A Labor insider said that "background negotiations" had been underway for the past two months to devise an exit strategy for the general secretary before the next state party conference.

"She was already gone but this is likely to give people a trigger to get rid of her," the source said.

"There are a lot of people desperate to get rid of her and are keen for a fresh start."

The source said that Ms Murnain was a "political survivor" so she could still emerge down the track with a revived political career but her time as head of NSW Labor was over.

In evidence to ICAC on Tuesday, NSW Labor's community relations director Kenrick Cheah said he was “pretty sure” Ms Murnain had asked him what was in the shopping bag when it was delivered.

NSW Labor boss Kaila Murnain will give evidence to ICAC on Wednesday.Credit:AAP

The inquiry on Monday also heard the plastic bag had allegedly been dropped at Labor’s Sussex Street headquarters by Mr Huang to then-general secretary Jamie Clements.

Ms Murnain replaced Mr Clements as the party boss in 2016 after he resigned over sexual harassment allegations.

It is expected that Mr Clements will give evidence and another former NSW general secretary, Sam Dastyari, who quit the Senate over his links to Mr Huang, has also been called.

One party source said: "It may be she escapes adverse findings, but politically there's no way back.
No one is saying 'let's wait for the six weeks to wrap up'."

Another senior party figure said it was "infuriating" that the party was being dragged through a corruption hearing when it should be "regrouping" to win an election.

"This behaviour is never OK, it never was and never will be. We all knew how careful we had to be with donations so this should never have happened," the figure said.

But some MPs also warned that Ms Murnain should not be judged too quickly.

A source said it was premature to judge Ms Murnain's future until she gives evidence. "What happens depends on what she says in the box. Right now, it's only her enemies rattling the cage."

One MP concurred, saying: "The question is what did she know, and what did she do?"