The NSW Upper House was told businessman Michael Hope of the Hope Estate phoned Liberal councillor Dale Troy about a plan in which Mr Mortomore would become a "sacrificial lamb" to "appease" Mr Kelly and stop government moves to take the council's planning powers.

Greens Upper House MP Sylvia Hale told Parliament on Thursday that Mr Hope "is said to have claimed to be speaking on behalf of six councillors who wanted the general manager . . . removed immediately".

Ms Hale told Parliament that Cr Troy and Greens councillors James Ryan and Chris Parker shared a "genuine concern" that some Labor councillors were trying to remove Mr Mortomore to appease Mr Kelly and Cessnock MP Kerry Hickey.

Councillors Troy and Ryan "believed that it appeared to be an unlawful attempt to influence Cessnock council's actions in relation to planning", Ms Hale said.

Parliament was told Liberal councillor Cordelia Burcham had also received a call from Mr Hope, and National councillor Neil Gorman "did not deny that he had been speaking to Michael Hope and did not deny the substance of the deal".

Parliament was told Cr Gorman told Cr Ryan he had been speaking to "well-placed" Labor Party members "who suggested that the minister would not remove Cessnock's powers if the general manager were removed".

The bizarre plan comes after months of turmoil between the council and NSW Government over planning issues, particularly the handling of major projects by developers who are major donors to the Labor party.

Councillor Ryan has sent a written complaint to ICAC and councillors Troy and Burcham have made verbal complaints.

A spokesman for Mr Kelly said he "categorically" denied being a party to any discussions.

Mr Mortomore declined to comment.

Mr Hope did not return the Newcastle Herald's call.