In short:

The NSW Liberal Party will be taken over by the federal executive for 10 months.

The move comes after the NSW division failed to nominate 140 candidates for the upcoming local elections.

What's next?

The NSW division has until next Thursday to comply, or the federal executive will exert its powers.

abc.net.au/news/nsw-federal-liberal-executive-nsw-division-takeover/104306032

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The federal takeover of the NSW Liberal division has hit a hurdle, with former NSW MP Rob Stokes refusing to serve on the proposed administration committee.

On Tuesday afternoon, the party's powerful federal executive launched an intervention into the NSW division, following its failure to nominate 140 candidates for the upcoming local elections.

The federal executive had requested three senior Liberals be appointed administrators for the state branch — former Victorian state treasurer Alan Stockdale, former NSW MP Rob Stokes, and former Howard government minister Richard Alston.

Under the proposal, the three men would run the party for 10 months.

The federal executive gave the NSW branch until next Thursday to comply, or it would exert its powers.

However late on Tuesday Mr Stokes, a former NSW Liberal frontbencher, turned down the request.

"I'm very humbled to be asked, but I'm not in a position to accept," Mr Stokes told the ABC.

NSW Liberal Party sources have told the ABC the federal executive never formally asked Mr Stokes, but that Mr Speakman had sounded him out about taking up such a role and put his name forward on that basis.

Mr Stokes's refusal means another candidate will need to be found, potentially with the cooperation of the NSW division.

NSW Liberals announce new director

Moments after the federal executive announced its intentions, the NSW division announced the appointment of its own state director, Chris Stone.

Mr Stone, who has previously held the same role, agreed to lead the organisation at the request of Opposition Leader Mark Speakman.

Mr Speakman said he looked forward to working with Mr Stone, who he said had an "in-depth understanding of the complexities of political operations".

"His expertise is exactly what the party needs to navigate the challenges ahead," Mr Speakman said.

However, Mr Speakman said he wasn't happy with the make-up of the committee that federal executive had requested.

"The proposed appointees have significant experience, but I would welcome the inclusion of an experienced female in this crucial role," Mr Speakman said.

NSW Liberal moderates 'in shock'

The NSW Liberals missed the deadline to nominate close to 140 candidates in this month's local government elections.

The party had threatened legal action after the NSW Electoral Commission refused its requests for an extension.

However, party officials have decided not to proceed.

The party admitted fault and sacked state director Richard Shields.

In a statement, the federal executive said it needed to act to address the "challenges within the organisational wing of the NSW Division".

"More importantly, we owe it to the millions of Australians who are relying on the Liberal Party to return Australia to good government after the next election to get our house in order," the statement said.

While the federal executive said its intervention was designed to put the party on a firm pre-election footing, moderates in the NSW division regard the move as a hostile takeover from conservatives.

"Everyone is in shock," one Liberal source told the ABC.

"It's unbelievable they haven't bothered to get Mark Speakman on board with the committee. It just demonstrates their arrogance," they said.

"You've got two 80-year-olds from Victoria [on the committee]. They have no self-awareness."

Another NSW Liberal MP said they were amazed the NSW branch could be administered by two Victorians, given that branch's poor performance.

"It demonstrates how out of touch they are," the MP said.

Other NSW Liberals said they weren't surprised by the takeover but had expected embattled president Don Harwin would have been included on a committee, to make the process seem less hostile.

Sacked director Richard Shields publicly blamed Mr Harwin, a moderate powerbroker, for the recent chaos in New South Wales, saying the president had responsibility for the council nominations.

Under the proposed changes, Mr Harwin will be left without a job.

He has been contacted for comment.