Morris Iemma has resigned as NSW Premier.
It is understood Water Minister Nathan Rees will take over.
Mr Iemma faced a caucus revolt this morning and Mr Rees had the numbers to overthrow Mr Iemma.
It is understood that there is so much division within the dominant right faction that Mr Iemma appeared to have lost a significant amount of support from once-loyal backers.
The right-wing powerbrokers Eddie Obeid and Joe Tripodi are understoood to have told Mr Iemma that he had lost the support of MPs and would not survive a caucus meeting.
The pressure intensified after outgoing Treasurer Michael Costa set off a series of bombs at his press conference earlier this morning.
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