The report on the Nationals' future, co-written by the party's former federal leader John Anderson, will warn it faces extinction like the Australian Democrats unless it merges or undergoes radical structural reform.

The two parties are merging in Queensland, albeit with in-fighting and drama, but the Nationals chairwoman in NSW, Christine Ferguson, said there was no desire to do the same in this state.

The NSW party voted overwhelmingly against a Queensland-style merger at its annual conference a month ago.

Ms Ferguson said the Coalition system in NSW was "working extremely well" and the Opposition was on track to win the state election in 2011.

"There's a need for a non-metropolitan party in NSW," she said, referring to the recent split in the federal Coalition over legislation which stripped AWB of its single-desk wheat-selling status.

The Liberals backed the bill but the Nationals opposed it.

Ms Ferguson said up to 85pc of NSW wheat farmers wanted the single desk retained and only the Nationals fought for them.

After the last federal election, Mr Anderson and the report's co-author, Michael Priebe, were asked to examine four options for the party's future: a merger, maintaining the status quo, becoming more independent, and splitting from the Coalition and going alone.

The report makes no specific recommendation but Mr Anderson is known to privately support a merger.

Federally, the Nationals have four senators and 10 MPs, of whom two senators and five MPs are from NSW.

In State Parliament, they have 13 MPs and five members of the upper house.