Mr Watson, a former northern district president of the Construction Forestry Mining and Energy Union, said on Sunday that Labor's decision to preselect Olympic shooter Daniel Repacholi to replace Hunter MP Joel Fitzgibbon without a rank-and-file vote was "very poor form".

The move, which party sources say is part of a complex factional deal involving Kristina Keneally's preselection in the Sydney seat of Fowler, has outraged some branch members and prospective candidates.

Mr Watson has been a party member for more than 40 years and has crossed swords with Mr Fitzgibbon in the past, including when the CFMEU endorsed a preselection challenger in 2003.

Mr Fitzgibbon is widely regarded as having promoted Mr Repacholi's nomination before announcing last week that he would step down, even though the 39-year-old has been a party member for only a few weeks.

"If Labor's vote drops in the election, it will only have itself to blame for the preselection and the way it was handled," Mr Watson said.

The Newcastle Herald understands branch members in the electorate have abandoned thoughts of a coordinated protest against Mr Repacholi's preselection, which will be rubber-stamped at a Labor national executive meeting on Friday.

But Mr Watson's daughter Peree, also a Branxton-Greta branch member, is one of five potential Hunter preselection candidates who have told the Newcastle Herald they are bitterly disappointed they have been denied a rank-and-file vote.

One Nation, which secured 21.6 per cent of the Hunter vote in 2019 with coalminer Stuart Bonds, has chosen local businessman Dale McNamara as its new candidate.

The Nationals, who picked up 23.5 per cent of the primary vote in 2019 and came within three percentage points of knocking off Mr Fitzgibbon after preferences, have picked 28-year-old school community relations officer James Thomson as their challenger.

Mr Fitzgibbon argued after Labor's 2019 loss that the party had shunned its working-class base while courting inner-city voters.

Mr Thomson revived this theme last week after Mr Fitzgibbon announced his departure.

"The Labor Party don't represent the working class anymore," Mr Thomson said.

An email to members from NSW Labor headquarters on Friday said state party officers had referred preselections for Hunter and the western Sydney seat of Fowler to the national executive after a "request from the federal Labor leader for an expedited preselection process".

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