Tamworth's councillors have backed Col Murray after what one called a "childish" threat to slash infrastructure funding by the Deputy Premier John Barilaro, on Friday.
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The Nationals leader and deputy premier slammed Cr Murray as "an ungrateful mayor" over comments he made about the $484 million Dungowan Dam project.
"I don't mind being here in Armidale today announcing more public servants coming to Armidale," Mr Barilaro said, on Friday.
"That sort of attitude by Col Murray means I probably won't go back to Tamworth."
Cr Jim Maxwell said the comment sounded like a threat.
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"I was absolutely gobsmacked that someone in his position would more or less say ... if you blokes don't pull your head in you most probably won't get any more money," he said.
"I think that's a terrible thing coming from the deputy premier. Especially publicly. If you want to say it privately that's a different matter," he said.
He said he was "taken aback" by Mr Barilaro's "very childish" attitude.
"I was disappointed to an extent that our local member didn't stand up for the Mayor more. I think it's a real slight on the constituents in the Tamworth electorate."
Councillors Russell Webb, Charles Impey, Mark Rodda, Helen Tickle and Juanita Wilson all joined Cr Maxwell to back the mayor.
Cr Tickle agreed the deputy's premier's comments sounded threatening.
"We don't like threats, we don't like being threatened and it will get him nowhere," she said.
"Elected representatives are there to represent the whole of the state. He's deputy premier, he has an obligation to represent every single resident in this state. And people have the right to ask questions - that's democracy. We live in a democracy.
"Why didn't he say I'm really happy to sit down and discuss this with the mayor and the senior water directorate staff further to work through this together. Let's solve problems together, not be threatening."
Cr Rodda said he was often a critic of the Mayor, but on water they were in lockstep.
"From my perspective, if he doesn't want to come back here - good! I'm sure he won't be missed. I wonder if this is a fellow at the twilight of his career as deputy premier. Those comments were just over the top."
Cr Webb said the main issue was getting a sensible solution that would guarantee the city's water supply in case of a future drought.
And he saw a silver lining to the stoush.
"I think it's just brought it to a bit of a head, and we need to move on anyway, so we're moving forward now," he said.
"Sometimes it takes something out of the blue - whether it be the right thing, the wrong thing - to be said, to cause a situation where everybody has to sit down to move forward."
Cr Impey said he'd heard nothing but support in the community for the mayor.
"The mayor's just sticking up for us, he's a local, he lives here, whereas politicians who gent sent in from Macquarie Street in Sydney and hold seats elsewhere, they don't live here," he said.
"I haven't heard anyone speak to the contrary."
Cr Murray refused to comment when contacted by the Leader on Friday. Cr Glenn Ingliss also refused to comment on Monday. Deputy Mayor Phil Betts didn't call back by deadline.
The mayor is a supporter of the dam project, but is concerned about the rules governing how the water will be allocated.
In January he told the Leader he was concerned it had not yet been revealed how the dam's 22.5 megalitres would be shared among users.
"There was a statement made early in the piece that 7GL [7000ML] would be available for the city ... I can only assume that would be 7GL in addition to the existing entitlement," he said, in January.
"I would suggest ... voters in the Tamworth electorate will have a strong voice and opinion on who might be the next local member [MP] if that allocation from Dungowan Dam is not appropriate."
The council has long called for changes to the city's water sharing plan, which governs water allocations.
Asked about the Deputy Premier's comments on Friday, Tamworth MP Kevin Anderson said "we've continued to make sure we look after our city".