In a move that could cost the city’s ratepayers about $1 million, the council’s Labor and Greens combined in a power play that left many stunned.

Already, some councillors have called on the state government to step in and sack the entire council. Premier Mike Baird and Local Government Minister Paul Toole were made aware of the sacking last night.

In a statement issued at 11pm after the councillors emerged from a confidential meeting, Lord Mayor Nuatali Nelmes confirmed the sacking but failed to identify any reason.

‘‘My colleagues and I have deliberated at length on this matter, and have decided that it would be in the best interests of the organisation to secure new operational leadership moving forward,’’ she said.

‘‘We are at a critical point in our city’s history. We have a once-in-a-lifetime opportunity in front of us with many city revitalisation projects, and we are working hard to deliver on our long-term goals of a financially sound council and a smart, liveable and sustainable city.’’

The announcement came after a spiteful debate in the council chamber when, in public session, the council voted to strip Mr Gouldthorp of his title and  shift much of his authority to Lord Mayor Nuatali Nelmes.

Some councillors described the move as ‘‘disgusting’’, ‘‘incredibly" poor’’ and ‘‘a blatant shift of power to you, lord mayor’’. The general manager himself described part of the debate as ‘‘more like tyranny than democracy’’ as he was shut out of debate and eventually excluded from the council chambers.

Under the move first proposed by Greens deputy mayor Michael Osborne, the general manager would become the council’s chief executive officer. His ‘delegations’, or authority over some council operations, will change, with Cr Nelmes having her delegations broadened.

The move came on the same night new financial data showed the council’s bottom line had improved by almost $40million since Mr Gouldthorp was appointed. It also came on the eve of Cr Nelmes flying to Geneva where she will join Newcastle university chief Caroline McMillen in signing an historic training agreement with the United Nations.

Ironically, the shift of power gives Cr Nelmes authority to sign off on overseas travel and expenses by council staff and councillors, including herself. It comes just four weeks after the Newcastle Herald revealed that Labor and the Greens had combined to authorise her flight to Geneva in business class despite council policy restricting her to economy class. It was Mr Gouldthorp who ordered that the business class ticket be cancelled.

The move also came on the same day that Cr Nelmes had signed off on Mr Gouldthorp’s performance review which gave him a mark of 6.3 out of 10 which, on the council scale, translates to ‘‘meeting all criteria and exceeding a number’’.

Mr Gouldthorp is two years into a five-year contract. The legality of some of the changes proposed to his delegations will almost certainly be tested, but ratepayers would be up for more than $1million if the council elect to pay him out of his contract.

When councillors later emerged from their confidential session, they announced that Mr Gouldthorp’s contract had been ended.