project, with the state budget $1 billion in the red.

He made the announcement on Tuesday night after a week of 'it's on, maybe it's not, yes, no' prevaracation.

The writing was on the wall when shortly after Mr Rees appointed Eric Roozendaal as Treasurer, Roozendaal said he would ring his close friend, Michael Costa - the deposed anti-rail former Treasurer - for advice.

Only last week Mr Rees told Labor Party faithful that the metro would go ahead and was not linked to the sale of the state's electricity assets.

Minutes earlier he had warned the Labor fund-raiser he believed the metro would be derailed by the scuttling of the power-sell off that day by the Opposition.

Then he rang the Premier's office and was told the metro was not dependant on the sell-off and the railway's capital works investment was quarantined.

Meanwhile, the anti-rail Michael Costa, as Treasurer, was insisting the metro timetable be pushed back a few years.

Mr Costa was still talking down the metro on Friday after being sacked the previous evening by then-Premier Morris Iemma.

Mr Costa was then dumped on Thursday evening by Premier Iemma who himself was forced to resign, or face the ignominy of being sacked by cabinet, having lost the support of Labor's right faction over his electricity privatisation plans.

But by Sunday, Mr Rees declared ''everything is on the table'' as his new cabinet sought to avert a financical crisis with the state revenue down $90 million a month.

Before an internal bloodbath saw the Iemma Government slaughtered and the Premier himself toppled, the deposed Treasurer said he believed the state now had no choice but to delay the proposed North West Metro project if it was to avoid losing its vital AAA credit rating in a few months.

Mr Costa said at his final press conference as Treasurer that state revenues were being undermined by the slowing national economy while RailCorp sought another $3 billion for upgrades.

''That is clearly not sustainable,'' Mr Costa said, noting the health budget had also blown out as the economy declined.

''My issue is with the funding of the North West Metro costing $12 billion which is not sustainable unless we cut spending in other areas: our health and education programs.''

The combative former Treasurer had been a catalyst in the surprise resignation of Transport Minister John Watkins on Wednesday, to take up an easier job in the private sector. Mr Watkins was tired of battling Mr Costa on every front over transport infrastructure costs